Textile quota policy amended

Amendment to be effective till january 1, 2006

With less than a month to go for the phasing out of textile quotas, the textiles ministry has made amendments in the quota policy pertaining to garments, knitwear, yarns and made-ups.

The amendments will ensure continuity in the policy for exporters during the transition period under the quota-free regime.

The amended notification will be effective initially for a period of one year starting January 1, 2005.

"Exporters have submitted their earnest money deposits and bank guarantees with the government for the current quota year, which would be redeemed only next year. Since the quota policy is concurrent with the quota regime, we have introduced some amendments in the quota policy so that there is continuity after December 31," a textiles ministry official told Business Standard.

The amendments will ensure the continuation of appeals and review provisions in respect of forfeiture orders in case of earnest money deposits and provide continuity to the existing mechanism to deal with the cases of non or short performance of the quota obligations, the ministry official said.

Earnest money deposits are deposits made by the exporters who take quota as performance guarantees. Exporters who fail to export the required amounts have to forfeit part of their deposits.

Under the amended policy, provisions relating to the procedures dealing with quota malpractices by exporters and provisions relating to the supervisory role of the textile commissioner would continue beyond December 2004.

Accordingly, review applications filed by the exporters will no longer be reviewed by the Apparel Export Promotion Council. They would be forwarded to the textile commissioner for further action.

Under the quota regime, India exports textile products to the United States, the European Union and Canada within specified annual quantitative restraints (textile quota limits).

The government has been regulating the exports of such textile product categories by means of Export Entitlement (Quota) policies notified under the provisions of the export-import policy.