The Apparel Export Promotion Council (AEPC) has intensified its call for the Reserve Bank of India (RBI) to increase the Interest Equalization Scheme (IES) rate from 2.75 per cent to 5 per cent for manufacturing exporters. Led by Dr A Sakthivel,Chairman, AEPC, during a high-level meeting with RBI Governor Sanjay Malhotra in mid-February 2026, this advocacy aims to offset the sharp rise in borrowing costs currently impacting the sector. As of March 2026, Indian exporters are contending with a perfect storm of logistics challenges; freight rates for European routes have surged from $500 to $4,000, while the rerouting of vessels around the Cape of Good Hope has added 14 to 20 days to transit times. This delay has significantly strained working capital cycles, particularly for MSMEs which constitute the backbone of the industry.
Enhancing liquidity to secure 2030 export targets
To safeguard India's $100 billion apparel export target by 2030, the AEPC is also urging the removal of the Rs 50 lakh cap on IES benefits, proposing instead a graded limit based on turnover. This push for liquidity comes as cumulative Ready-Made Garment (RMG) exports for April–January 2025-26 reached $13.13 billion, a modest 1.6 per cent growth despite the 3.8 per cent decline recorded in January 2026. MSME exporters play a critical role in employment, but procedural delays and high interest rates are undermining their competitiveness, stated Dr. Sakthivel. By aligning financial support with the newly ratified India-EU FTA, which provides zero-duty access to major markets, the industry seeks to transform these logistics-induced challenges into an opportunity for long-term structural resilience and digital-first credit accessibility. AEPC is India’s nodal agency for promoting garment exports, representing over 8,000 manufacturers. It facilitates trade via global expos and policy advocacy, focusing on high-growth categories like Man-Made Fiber (MMF) and technical textiles. Founded in 1978, it now leads sustainable manufacturing initiatives under India’s Export Promotion Mission.
