The recent filing for bankruptcy by the New York-based CIT Group could hit the textile and apparel export sector in India, since it was one of the financing companies which used to provide short term financing to small and medium sized suppliers.
This news has come at a time when shipments from this crucial export sector, which is the biggest employment generator after agriculture, were on a path of slow recovery after having borne the brunt of the global recessionary trends in the last 12 months.
The markets of the US have a 30 percent share of overall exports of clothing from the country and total to US $3 billion. Most of the suppliers are small and medium sized companies, who used to depend on CIT Group for short term financing.
According to garment exporters, this news has come in the busiest season for the clothing exporters who are preparing to ship large consignments of goods in time for the products to hit the retailer’s shelves before the Christmas festivities.
Now onwards these exporters will have to depend on the buyers to send the payments on time, else they will be severely constrained for credit and will be unable to process any further orders for lack of financing.
This news has come at a time when shipments from this crucial export sector, which is the biggest employment generator after agriculture, were on a path of slow recovery after having borne the brunt of the global recessionary trends in the last 12 months.
The markets of the US have a 30 percent share of overall exports of clothing from the country and total to US $3 billion. Most of the suppliers are small and medium sized companies, who used to depend on CIT Group for short term financing.
According to garment exporters, this news has come in the busiest season for the clothing exporters who are preparing to ship large consignments of goods in time for the products to hit the retailer’s shelves before the Christmas festivities.
Now onwards these exporters will have to depend on the buyers to send the payments on time, else they will be severely constrained for credit and will be unable to process any further orders for lack of financing.
