Government Allowed Fresh Cotton Exports of 2.5 million Bales

The Indian Union Government on 30 December 2010 allowed fresh cotton exports of 2.5 million bales from 11 January 2011. The registration process for the same began on 31 December 2010. The Directorate General of Foreign Trade (DGFT) in the Commerce Ministry will accept applications till 6 January 2010. Of the 5.5 million bales (of 170 kg each) permitted for the current cotton season, exports have already been transacted for 3 million bales.

The government had allowed 5.5 million bales for exports during the cotton season 2010-11 (October-September). The exporters had however failed to ship the entire quantity after unseasonal rains delayed arrivals in the spot market.

Applicants who furnished stipulated documents within the time limit will be granted registration certificates (RCs). The document submission will start from 11 January 2010 and if an exporter gets RC on the same day effectively he can start exporting immediately. The government also decided that those exporters who did not export full quantity for which RC was obtained by them from the Textile Commissioner in October 2010 would be disincentivised by reduction of their pro-rata quantity by the percentage of such default.

RCs would be issued for up to one-lakh bales of cotton on a single application which will be done on a pro-rata basis with a ceiling of one-lakh bales per IEC and no application below 500 bales would be considered.

The Commerce Secretary specified that if any new applicant failed to submit documents in stipulated time then he would be declared ineligible and he would forfeit his right to future allocations. Further, those exporters who fail to ship the registered quantity within the stipulated time will be debarred from future allocations and, penal action will be initiated against them under the Foreign Trade Act.