There is news of apparel exporters being denied export credit facilities by the credit insurance companies and this is happening at a time when clothing shipments from India are in a negative trend. This is leading to a panic among textile and clothing exporters who would not like to take the risk of exporting without adequate risk cover.
To get to the depth of this development Fibre2fashion spoke to the various stake holders within the sector. We began by speaking to Mr Dilip Barua, Director of the Assam based Fabric Plus Pvt Ltd and a exporter of silk stoles. Fabric Plus recently set up the first of its kind eri-silk spinning plant in Assam. Mr Barua said, “Pre-risk of export without insurance cover can not be ignored. There are many exporters operating without letter of credit and they depend on credit insurance as a protection”.
“These exporters feel insecure when exporting goods without insurance and avoid exporting rather than losing money incase of defaults, which ultimately leads to problems for all the suppliers in the supply chain and also can lead to joblessness as the manufacturer may choose to close operations”, he said.
He concluded by saying that, “One will agree that the scheme of credit insurance should not be abused; but at the same time insurance agencies cannot put a brake. Rather they should judiciously treat the cases and allow the genuine deals so that a potential industry like garments export can play its role in development of the industrial sector and earn foreign exchange for the country”.