Srinivasan urged the government to extend urgent policy interventions/support in order to provide fiscal relief and ensure credit flow with extension of the Remission of State and Central Taxes and Levies (ROSCTL) scheme to cotton yarn and fabrics so that India’s competitiveness is enhanced at a time of the falling markets. Also, there is a need to extend interest subvention of 3 per cent beyond March 31, 2020, and also cover cotton yarn within that to ease the financial burden, etc.
The spread of Covid-19, especially in the United States, leading markets of Europe like Spain, Portugal, Italy and even the United Kingdom has led to cancellation/deferment of orders on a very large scale. Buyers and major retail shops importing home textiles from India have put development of any further business on hold.
The exports of cotton yarns and fabrics have virtually come to a standstill.
T Rajkumar, Chairman, Confederation of Indian Textile Industry
(CITI) pointed out that the demand for textile products and also domestic sales have come down to a grinding halt due to the panic situation created by the outbreak of Covid-19. He also pleaded an urgent need for a relief package to mitigate the crisis.
Besides affecting order flows, this could potentially result in renegotiation of realisations as well as an elongated receivables cycle for the exporters.