Sri Lankan companies may postpone payment! Exporters of Indian fabrics are concerned

28th September 2021, Mumbai:

South India's fabric exporters are afraid that the island nation's economic turmoil may result in payment delays from customers. Sri Lanka is a major exporter of Indian cotton fabric.

Due to pent-up demand, India exported cotton textiles worth the US $ 179.29 million, increasing 38.47 percent from the previous year.

The Sri Lankan rupee has lost more than 10% of its value versus the US dollar in recent days, raising worries among Indian textile and fabric exporters that payments may be delayed. This follows a decrease in shipments to Sri Lanka.

According to a story in The Economic Times, Siddhartha Rajagopal, ED, The Cotton Textiles Export Promotion Council (Texprocil), claimed that owing to pent-up demand, cotton fabric shipments to Sri Lanka are on the rise.

However, it began to decline in August and then came the economic crisis, which interrupted commerce. The economic crisis in Sri Lanka is anticipated to have a greater impact in the coming months.

However, Raja Shanmugam, President of the Tirupur Exporters Association, believes that the present turmoil in Sri Lanka may benefit India's clothing exports.

Sri Lanka, he added, is a rival of India in the clothing industry. Global clothing purchasers may look to India as a sourcing nation and make more orders now that the country is experiencing an economic crisis.

“In the previous year, we have seen Sri Lanka restrict non-essential imports such as automobiles and other things, but necessary exports have continued,” said Ajay Sahai, Director General, Federation of Indian Export Organizations.

We've requested the government for a line of credit to be granted to Sri Lanka since that the payments have become irregular.”

It's worth noting that the emergence of Covid-19 is partially to blame for Sri Lanka's economic difficulties. Furthermore, Rajapaksa's decision to restrict the use of fertilizers by the Sri Lankan government, which wants agriculture to become completely organic, may have exacerbated the situation.

According to Praveen Khandelwal, General Secretary of the Confederation of All India Traders (CAIT), traders are experiencing payment issues as a result of the Sri Lankan conflict. “Rs. 8,000 crore is blocked in Sri Lanka, and there is no indication when payments would resume,” he added.

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