Roll Back of Ban on Cotton Exports The Cotton Budget for the cotton year 2011-12 was prepared by the Cotton Advisory Board. In arriving at a Cotton Export Policy a balanced perspective is taken, carefully addressing the interests of all stakeholders including farmers, traders, yarn producers and the apparel industry.
Last year, raw cotton exports were of the order of 78 lakh bales and in this cotton year within five months, exports have crossed 95 lakh bales highest ever in the last ten years, even though the crop arrival estimates of cotton are the same. The three Secretaries – Agriculture, Commerce and Textiles drew the attention of the Government that the exports had far exceeded the estimated exportable surplus, raising concerns on the adequate availability of cotton for domestic industry. In this backdrop, the Government had taken a decision to suspend the export of cotton given the sudden surge in cotton exports.

The informal Group of Ministers chaired by Finance Minister met on 9th March 2012 to review the situation and a decision was taken to roll back the ban subject to certain conditions. Today, DGFT has issued a notification which clarifies the position that exports orders already registered with DGFT so far but not yet exported will be expeditiously scrutinized to ensure that their papers are in order and revalidated. The first priority will be given to those consignments which have been handed over to Customs. The GoM is scheduled to meet within the next two weeks to assess the cotton budget afresh and take an appropriate policy view in the matter.

Meanwhile, the price situation in the mandis is being closely monitored and the Cotton Corporation of India has been authorized to intervene for both commercial and MSP operations, wherever necessary. The Indian industry has reported that it is also in the market to buy.

Anand Sharma meets MPs on the issue of Cotton

Shri Anand Sharma the Union Minister of Commerce, Industry & Textiles met with the Members of Parliament from the states of Maharashtra, Gujarat & Andhra Pradesh on the issue of lifting ban on the cotton export. The Minister apprised them of the rational of various decisions taken regarding the issue. The Ministry of Textiles made a detailed presentation to the Members of Parliament. Shri Sharma also answered the queries raised by the Members of Parliament. Minister of States for Textiles Smt. Panabaka Lakshmi, Commerce and Textiles Secretaries and Director General Foreign Trade were also present in the meeting.

RELATED DGFT NOTIFICATION IS AS FOLLOWS:-

Notification No. 106 (RE-2010)/2009-14

New Delhi, Dated 12th March, 2012

Subject:- Removal of Prohibition on export of cotton (Tariff Codes 5201 and 5203)

S.O. (E) 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.

(Anup K. Pujari)

Director General of Foreign Trade

e-mail: dgft@nic.in

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