Devising his own strategy to bring down costs, Raja Shanmugam of the Rs 60 crore Warsaw International in Tirupur decided there would be no wastage henceforth. ‘‘Earlier, we would provide 5 per cent more fabric to provide for wastage and embellishments,” he said, adding that his company was “slowly stepping into hedging”.

Hedging, which many exporters are now using to cover losses, involves forward contracts and option dealing. The TEA has proposed to the Finance Minister that the hedging cost be compensated or that dual exchange rate be considered. The export body has pleaded that for exporters, the value of rupee should be frozen at Rs 42.

The Centre has announced two rounds of incentives, including additional subvention of 2 per cent in pre-shipment and post-shipment credit over and above the 2 per cent extended earlier. This is apart from the extension of the Technology Upgradation Fund Scheme (TUFS) which provides for 4-5 per cent interest reimbursement on investment by textile companies.

The Centre also hiked the duty drawback scheme from 7 per cent to 10 per cent with effect from April 1 to provide some succour. Exporters agree this has helped. ‘‘However, we would like it to go up to 15 per cent,” said Oswal’s Sandeep Jain.

‘‘We can export to countries like Italy and Germany, but there is a lot of competition and they are aware of our desperate situation. Hence they are negotiating very closely from a position of advantage,” says Sanjay Jain, whose company Blue Mount Garments exports shirts and womenwear to US-based retail giant Walmart and fashion major GAP. “In my 17 years in the business, I have never known such insecurity,” he added.

... contd.