AEPC asks government to extend MSME benefits to apparel sector
May 19, 2020
The Apparel Export Promotion Council of India has asked Prime Minister Narendra Modi to extend micro, small, and medium enterprise benefits to the apparel sector as its struggles during lockdown.
“We would request that the apparel exporting industry may be treated at par with the MSME sector as we work on wafer-thin margins of 4% to 5%,” AEPC chairman, A Sakthivel, wrote in a letter to Modi, accessed by the Press Trust of India.
“A large number of our exporters lost huge money by booking forward contracts and we feel that the loss can be converted into a working capital-term loan with repayment in three years with a 6% interest rate,” suggested Sakthivel.
Many exporters are seeing their cash reserves swiftly dry up with orders being cancelled and nonpayment of export bills.
Sakthivel asked for the Employees' Provident Fund be extended to the apparel industry and cover all apparel export units. The scheme sees both small business employers and employees contribute monthly to a kitty that will be used for the employee’s retirement.
Other suggestions include increasing the time period that the interest equalisation scheme covers by at least two years and extending the scheme’s 5% benefit to all units on par with the MSME sector. Granting additional working capital without collateral should also be extended to all sizes of apparel export business, wrote Sakthivel.
The AEPC chairman made a case for allowing Indian businesses to export non-surgical masks, stating that there is significant global demand for them.
“There is a huge opportunity for export of such masks,” wrote Sakthivel.
“There is a huge demand for the export of these products and AEPC has already identified the international markets for these masks. The council assures the government that it will ensure exports of these items to the tune of $1 billion [Rs 7,387 crore] within the next three months.”
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