Officials from the Reserve Bank of India (RBI) held discussions with leaders of the Tiruppur Exporters Association (TEA) to assess the state of private investment in the apparel sector, amid concerns over slowing growth and structural challenges.
During the interaction, Dr Harendra Behera, Director in the Department of Economic and Policy Research at the RBI, underscored the importance of employment generation and sustained investment in the textile industry. He observed that private investment growth had slowed since 2008, with a noticeable shift towards financial assets. He further stated that factors such as high financial costs, regulatory uncertainties and global geopolitical developments were acting as constraints on fresh investment. He also emphasised that MSMEs should actively utilise schemes and initiatives introduced by the government and the RBI to support their expansion.
Building on these concerns, Kumar Duraisamy, Joint Secretary of TEA, highlighted the challenges faced by MSMEs in the sector, including manpower shortages, stringent regulatory requirements, the impact of Basel III norms and low credit scores. He noted that while significant efforts had been made towards sustainability through water recycling systems, the high maintenance costs of common effluent treatment plants were affecting competitiveness. He also called for more liberal financial support from banks to address these constraints.
Echoing the need for stronger institutional backing, R Gopalakrishnan, Treasurer of TEA, stressed the need for stronger institutional credit support for the sector. He urged the RBI to consider dedicated funding mechanisms for MSME exporters, on the lines of priority lending frameworks seen in sectors such as education and agriculture. He also called for clear guidelines to be issued to both public and private sector banks to ensure that such support reaches the intended beneficiaries. In addition, he suggested the development of an online platform, similar to the Jan Samarth portal, to simplify the loan renewal process for MSME exporters.
The interaction reflects ongoing efforts by policymakers and industry stakeholders to address investment bottlenecks and improve credit access within India’s apparel export ecosystem.
