The government has allowed fresh applications for exports of the balance amount of the 720-million kg cotton yarn quota for 2010-2011. However, traders will now have to register with the Director General of Foreign Trade (DGFT), instead of the textile commissioner.
The Ministry of Textiles had suspended registration after the 720 million kg cap for cotton yarn exports was not completed within the December 1 deadline. According to K Silveraju, secretary general of Sima (South India Mills’ Association), DGFT has invited fresh applications for the remaining quantity. Even entities who do not produce yarn, but want to trade may also apply for the license. This, industry sources said could marginalise genuine manufacturers.
An official said DGFT has put a cap of 100,000 kg per IEC and the allocation will be done on pro-rata basis. Keeping cognizance of the projected number of applications, an individual may get a license of 3,000-4,000 kg. He said the spinning industry has been asking the government to keep the export-oriented units and SEZs out of the purview of the prescribed quota, but the government did not pay heed to their demands.
“The entire exercise seems to have been made in a hurried manner. We were expecting a prudent approach from the commerce ministry but they repeated the mistakes,” the official said.
The textile associations want the cotton yarn quota to be revised from 720 milion kg to 780 million kg following a 12 per cent growth in cotton yarn production that was mentioned during the last meeting with the textile commissioner.