Cotton Export Ban Withdrawn, Exports Limited
to Contracts Already Registered – New Registration Suspended to Support
Domestic Industry
New Delhi, 12 March
Following the push by Saurashtra Cotton exporters delegation led by Congress leader
Ahmed Patel to Sonia Gandhi, Minister Anand Sharma
backed off to withdraw the one week old ban on cotton exports. In the 12 March notification
issued by DGFT, exports are technically “free” subject to condition of DGFT
contract registration. That is only contracts registered till 5 March will be
honoured. New contracts will not be registered, the
result is that exports can take place for another three to four weeks in which
the Registration Certificates for contracts in the pipelines will expire. Thus
the “free” exports facility will exist only on paper since the connected
registration requirement cannot be fulfilled by the suspension.
The turmoil in cotton
exports from India has increased the transaction cost and will affect the price
realisation. India is already competing with Pakistan, Australia, Uzbekistan,
USA and other cotton producing countries in the tropical regions of Africa and
Latin America for the market in China. The land of the Dragon is building
stocks as a part of Government policy even as demand is far below supply. (The
best option for India is to put an export duty to control exports and also to
recover some of the subsidies on water, electricity and fertilisers on cotton
production - Editor).
[DGFT Notification No. 106 dated 12th March 2012]
Subject: Removal of
Prohibition on export of cotton (Tariff Codes 5201 and 5203)
In exercise of the powers conferred by Section 5 of
the Foreign Trade (Development & Regulation) Act, 1992 (No.22 of 1992) read
with Para 2.1 of the Foreign Trade Policy, 2009-14, the Central Government
hereby withdraws the Notification No. 102
(RE-2010)/2009-14 dated 05.03.2012 and makes the following amendments
with immediate effect in respect of Sl. No. 161 A {ITC(HS)
Classification}.
2. The entries against Sl. No. 161 A in Chapter
52 of ITC(HS) Classification} will be as follows:-
|
Chapter 52 |
|||||
|
S. No. |
Item Tariff Code |
Unit |
Item Description |
Export policy |
Nature of
Restriction |
|
161 A |
5201 |
|
Cotton,
not carded nor combed |
Free |
Prior registration
of contracts with DGFT |
|
|
5203 |
|
Cotton,
carded or combed |
Free |
Prior registration
of contracts with DGFT |
3. Procedure of obtaining Registration
Certificate (RC) was notified in Notification No. 63 (RE-2010)/2009-14 dated
04.08.2011 and modified by Notification No. 74 (RE-2010)/2009-14 dated
12.08.2011. Time to export (validity of RC) was “30 days from issue of RC”.
Because of prohibition imposed by Notification No. 102 (RE-2010)/2009-14 dated
05.03.2012, this time limit may require to be extended in respect of those RCs,
that were valid as on 05.03.2012 and for which LEOs are yet to be issued &
exports completed. All RCs would need to be submitted to DGFT for scrutiny and
revalidation. Exports can be effected only after RCs
are revalidated.
4. Issue of new RCs stands suspended until
further orders.
5. Policy Circular No. 58 dated 09.03.2012 covers
those RCs for which LEOs have been issued.