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RBI's repo rate hike will hit Knitwear sector, says Exporters

Real estate major House of Hiranandani said the rate hike was on "expected lines" and added it would impact the revival of the sector.


PTI 01 Aug 2018, 02:11 PM India

The Federation of Indian Export Organisation, Southern region, today said the RBI's repo rate hike was on expected lines given the inflation outlook while Knitwear exporters in Tirupur expressed concern that the increase in the cost of credit would impact the sector.

The FIEO's southern region Chairman A Sakthivel, however, pointed out the tight liquidity conditions faced by the export sector especially, by the MSME, and requested the RBI Governor to bring export credit under priority lending category immediately.

"The unfavorable condition in our major markets, tough competition from neighboring countries coupled with higher interest cost and deficiency in the dispensation of the working capital requirement of the exporters strongly argue for the need for placing Export Finance under priority sector lending," he said in a release.

Tirupur Exporters' Association President Raja Shanmugham said the increase in the cost of credit would make the export units "uncompetitive" and would impact the knitwear garment exports. In a statement, he said the sector was already struggling due to the price pressure in the overseas market.

Real estate major House of Hiranandani said the rate hike was on "expected lines" and added it would impact the revival of the sector.

"Construction activity had started to pick up slowly but the rise will hurt consumer sentiment", Chairman and Managing Director of the company Surendra Hiranandani said in a release.

The RBI today raised its interest rate by 25 basis points on inflationary concerns for the second time in two months.

 (This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


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