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Time of India

Association seeks liberalised working capital credit norms for MSMEs

COIMBATORE: The Tirupur Exporters and Manufacturers Welfare Association has submitted a representation to Prime Minister Narendra Modi , seeking liberalised working capital credit norms for MSMEs in the textile and garment sector. In a letter, association president MP Muthurathinam urged the Prime Minister to direct scheduled banks to offer collateral-free packing credit against confirmed export orders or letters of credit, backed by an Export Credit Guarantee Corporation of India (ECGC) insurance cover. He said the current banking norms, including the CIBIL score requirement of 800 points, limit the growth potential of MSMEs (micro, small, and medium enterprises), which dominate the Tirupur garment cluster. 'The textile and garment sector is already burdened with high input costs of fuel, electricity and yarn. However, with recent tariff changes by the US and India's Free Trade Agreements (FTA) with countries like the UK and the UAE, our exporters regained a price advantage over competitors like China, Bangladesh and Vietnam,' the letter noted. Despite a surge in global orders, many units reportedly are unable to execute them due to a shortage of working capital and the 45-day bill payment rule. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Use an AI Writing Tool That Actually Understands Your Voice Grammarly Install Now Undo 'A need-based approach in bank financing would help exporters capitalise on the demand surge, boost employment and contribute significantly to India's GDP and forex reserves,' the letter added. The association highlighted that timely support could help India achieve global leadership in garment exports and fulfil the govt's vision of ' Make in India ' and self-reliance. The industry body called for urgent intervention from the Prime Minister's Office to relax credit norms and provide relief to struggling MSMEs, enabling them to meet growing domestic and international demand.