Exporters of Tirupur are apprehensive that the 25 basis points hike in the repo rate will have a detrimental impact on knitwear exports from this region.
They feel the repo rate increase will further impact their business, particularly as they operate on wafer-thin margins.

Also interest rates are high when compared to rates prevailing in the international market. Orders are taken in advance and they are not in a position to revise the price. This will impact small and medium enterprises as there is stiff competition and they are already losing out to competing countries.

The Interest Equalisation Scheme had provided for three per cent interest subvention to compensate for the high rate. But this three per cent is seen as inadequate.

Exporters have appealed for a two percentage point increase in the Interest Equalisation Scheme (from three per cent to five per cent) with immediate effect to compensate the 25 basis point hike in repo rate.

They further want banks to take a lenient view while extending credit to small and medium enterprises.

Knitwear exporting units have been under pressure since the implementation of GST. Knitwear exports from Tirupur slipped to Rs 24,000 crores during the last fiscal against Rs 26,000 crores in 2017-18.