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India to ease debt repayment for textiles makers

India may extend the two-year moratorium for debt repayments by textile units. While steps have been taken to boost liquidity for struggling textile units, it is felt that giving them some time for debt payment will ease their financial burden. A liquidity crunch is being faced by manufacturers and exporters. There have been delays in GST refunds. The medium and small industry debt restructuring package may be extended for the entire industry and so prevent many companies from turning into non performing assets.

The industry has also requested that remission of duties or taxes on the export product scheme should cover all products in the textile value chain as it is the reimbursement of duties and taxes paid. Another proposal is that the three per cent interest subvention scheme for export products should be raised to five per cent for all textile and clothing products and that recycled polyester staple fiber should be placed under five per cent GST. The industry has requested that dues and TUF subsidies be released along with stimulus measures such as debt restructuring, e-auctioning of CCI procured cotton and extension of export credit. Cotton yarn consumption in the domestic market has stagnated during the last four years. The 35 per cent fall in yarn exports in recent months has aggravated the situation.