The Directorate General of Foreign Trade (DGFT), under the aegis of the commerce ministry, has invited applications for cotton exports for the one-million bales (1 bale = 170 kgs) additional quantity that the textile ministry has allowed for shipment during the current season (October 2010-September 2011).
Cotton exporters who were struggling with the stockpile will submit their applications for registration for exports to DGFT for a week beginning Monday.
Although DGFT is set to accept applications from reputed exporters, the agency has tightened regulations to control entry of errant and opportunistic traders.
During its initial effort for 5.5 million bales of cotton exports, DGFT invited criticism from every quarter, as many small and opportunistic traders got hold of quota and later sold these to perennial shippers. The allocation will be done on a pro-rata basis.
DGFT has tightened the noose by putting a ceiling on the application quantity of a maximum 25,000 bales or 4,250 tonnes.
Over and above, only those exporters who successfully shipped cotton in 2008-09 and 2009-10 are eligible for exports this time. Apparently, DGFT has not incorporated last year’s exporters to submit an application this time, assuming only genuine exporters should be registered and allowed for exports.
Further, DGFT has also made a letter of credit (LC) issued by banks in favour of exporters irrevocable. This means, LC opened in the name of a particular firm, cannot be transferred or amended in the name of other firm.
