ANNOUNCEMENT 29 May 2012In May 2012, the government of India announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
On 29 May 2012, the Ministry of Textiles approveda INR 35,000 crores (USD 6 billion) restructuring package for the debt owed by the domestic textile industry. The applications will be considered on a case-by-case. The stated goal of the scheme is to improve the participating companies' working capital positions.
Furthermore, the Ministry of Finance in consulation with the Reserve Bank of India will consider the case for a 2 year moratorium on term loans, allowing a special reclassification for Non Performing Assets (NPAs) and the conversion for eroded working capital to a working capital term loan.
This measure may support some textile firms that otherwise might have left the industry. The financial support therefore affects detrimentally the conditions of competition for solvent competing firms, which may include foreign firms.