Relief package may help recover losses by garment exporters

The garment export industry is estimated to have lost orders worth Rs 1,500 crore, as many exporters had to turn down orders, since they did not want to operate at low costs. With garment exporters operating at net margins of just 7-10 per cent, the rupee appreciation has affected the industry badly. Net realisation has been shaved off by 10 per cent with the rupee becoming stronger by 10 per cent.

Finance Ministry??s announcement of relief package for exporters, may recover some losses. But garment exporters feel the Finance Ministry??s relief package for exporters in the wake of a strengthening rupee came a little late.

Exporters found saying that the three per cent increase in duty drawback rate, refund of customs duty paid for imported goods that are later exported abroad, will increase the bottomline by three percent. The two percentage points interest relief will also add 0.5 per cent to the bottomline. The decisions to reduce interest rate on pre- and post-shipment credit by two percentage points and the hike in duty drawback rate will help the industry recover at least part of its losses.

Exporter can expect a 3.5 percent increase in bottomline. Welcoming the decisions to help exporters reeling under the rupee surge, exporter wished the Government had come out with these announcements earlier.