Apparel Export Promotion Council (AEPC) Chairman Dr A Sakthivel requested Hon’ble Minister of Finance Smt Nirmala Sitharaman to extend moratorium on payment of installments for term loans till end of current fiscal considering the slowdown in business. “Given the continued lockdowns, the situation of the global Apparel scenario and the fact that revival of the Apparel exporting Industry is yet to take place to the pre-Covid period, I request for the extension of this facility till 31 March 2021,” Dr Sakthivel wrote in his letter to the Hon’ble Minister.
The Chairman referred to the Rescheduling of Payments (Term Loans and Working Capital Facilities) announced in RBI’s Regulatory Package dated 27 March 2020 where it had been announced that in respect of all term-loans, all banks and NBFCs are permitted to grant a moratorium of three months on payment of all instalments falling due between 1 March 2020 and 31 May 2020.
Further, in view of the extension of lockdown and continuing disruption on account of COVID-19, RBI in its Regulatory Package dated 23 May 2020, had extended the moratorium by another three months i.e. from 1 June 2020 to 31 August 2020 on payment of all instalments in respect of term loans.
“For the Apparel exporting sector, the export trends are yet to show signs of full recovery. Apparel exports have declined by 91.04% in April, 66.19% in May, 34.84% in June and 22.09% in July, 2020. This is largely due to the fall in global demand and the sector’s heavy dependence on the western markets where retail sales are yet to pick up. In fact, the industry is still facing a lot of defaults due to bankruptcy filing by big brands and buyers, delayed export realizations and inability to restore manufacturing at the pre-Covid capacities.
Dr Sakthivel said that the Apparel Exporters have worked hard in fulfilling their export commitments despite the pandemic and difficult global scenario. He also made a similar request to RBI Governor Shri Shaktikanta Das saying the decision will help mitigate the suffering of the Apparel Exporting Industry and the millions of workers engaged in it.