He says the sector is undergoing a severe crisis due to various factors, including the economic impact of COVID-19, the Russia-Ukraine war and the anticipated economic slowdown in the West
He says the sector is undergoing a severe crisis due to various factors, including the economic impact of COVID-19, the Russia-Ukraine war and the anticipated economic slowdown in the West
Chief Minister M.K. Stalin on Wednesday wrote to Prime Minister Narendra Modi requesting him to announce a special Emergency Credit Line Guarantee Scheme (ECLGS) for the Micro, Small and Medium Enterprises (MSMEs) in the garment sector immediately, to help them tide over the current crisis.
The garment export sector is undergoing a severe crisis as a result of multiple factors, including the economic impact of COVID-19, and the Russia-Ukraine war and the anticipated economic slowdown in the West. I understand that the month-on-month growth rate in readymade garment exports is now showing a sharp decline, he pointed out in his letter.
Tiruppur is one of India’s largest knitwear exporting clusters that cater to the U.S., the U.K. and European markets. MSMEs constitute 95% of the exporting units in this cluster. It is reported that the orders for the summer season have now declined by around 40% when compared to last year, the letter said.
He noted that the exporting units and their supplier MSMEs were staring at a severe financial crisis in the ensuing months due to low demand. Lakhs of jobs, particularly for rural women who form a significant chunk of the workforce were in danger. Twenty per cent additional collateral-free credit may be provided under the new scheme, he added.
