ECLG Scheme: The President of Tamil Nadu’s Tripurr Exporters Association has released an official press statement, to Finance Minister Nirmala Sitharaman, highlighting the severe financial crisis that the state’s knitwear garment exporting businesses have been facing. The covid pandemic, hike in the prices of Cotton Yarn, and the Russia-Ukraine war has made the situation worse, especially for smaller garment businesses. TEA has, therefore, urged the Finance Ministry to provide 20% credit, under the Emergency Credit Line Guarantee Scheme, to knitwear garment exporting MSMEs. The association has also requested RBI Governor, Shaktikanta Das, to make NPA norms more lenient for these businesses.
An Appeal from TEA to Nirmala Sitharaman
In an official press release to Nirmala Sitharaman, Union Minister of Finance, the association stated that 20% of credit under the Emergency Credit Line Guarantee Scheme should be safeguarded to rescue the Trippur knitwear garment exporting businesses, especially MSMEs from their current financial crisis. The key causes of the issue were less booking orders, payment delays, non-acceptance of booked orders, and shipping time lag.
Raja M Shanmugham, the President of TEA, says the Russian-Ukraine War has adversely affected the global trade, just as Trippur’s Knitwear Exporting MSMEs struggle to recover from effects of the COVID pandemic and cotton yarn price hike.
The future of Trippur Knitwear Exporting MSMEs was a concern for Shanmugham. Moreover, the association has urged RBI Governor Shaktikanta Das to provide leniency on NPA norms for MSMEs whose bad loans have crossed the threshold duration of 90 days.
Trippur Exporters’ Association (TEA) thanks SBI
Earlier this year, Tirupur Exporters Association (TEA) called upon the State Bank of India (SBI) to assist small and medium-sized enterprises (MSMEs) in overcoming its financial crisis, as the knitwear industry is struggling with an extraordinary rise in cotton prices that has quadrupled in the past few years.
Trippur’s knitwear garment industry and stakeholders have been overburdened by the subsequent increase in cotton yarn prices, and they are requesting the government to come to their rescue.
It is for this reason that Shanmugham thanked the State Bank Of India for continuing to support the Trippur knitwear industry since the month of May, 2022, when TEA first urged financial support from the bank.