Exporters of Tirupur are apprehensive that the 25 basis points hike in the repo rate will have a detrimental impact on knitwear exports from this region.

"Knitwear exporting units have been under pressure since the implementation of GST. The repo rate increase will further impact our business, particularly as we operate on wafer-thin margins," said Raja M Shanmugham, President, Tirupur Exporters’ Association.

"Orders are taken in advance and we are not in a position to revise the price. This will impact MSMEs, as there is stiff competition and we are already losing out to competing countries. Our interest rates are high when compared to the rates prevailing in the international market.

"The government had announced the Interest Equalisation Scheme and provided 3 per cent interest subvention to compensate the high rate. But this 3 per cent is inadequate," he said and appealed for a two percentage point increase in the Interest Equalisation Scheme (from 3 per cent to 5 per cent) with immediate effect to compensate the 25 bps hike in repo rate.

Banks should take a lenient view while extending credit to the MSMEs, he added. It may be noted that knitwear exports from Tirupur slipped to Rs.24,000 crore during the last fiscal against Rs.26,000 crore in 2017-18.