Duty and curbs on cotton exports to go from Oct 1: Commerce Secretary

NEW DELHI: The government today said curbs on cotton exports and the Rs 2,500 per tonne duty on the shipments of the natural fibre would go from October 1.

"Cotton exports on Open General Licence (OGL) will be allowed from October 1, which means unrestricted and free exports of cotton. (Also) there will be no export tax on cotton," Commerce Secretary Rahul Khullar told PTI.

Following a sharp rise in outward shipments of cotton and increase in domestic prices, the government had taken a series of policy decisions during April and May this year to curb the exports.

A duty of Rs 2,500 per tonne was imposed followed by suspension of registration of new export contracts and restriction of shipments under the licence regime.

The Secretary said the Textiles Commissioner office would start registering export contracts from September 1.

"The idea (behind starting registration of contracts) is that you (exporters) can register it now and when cotton crop arrives in October you can export," Khullar said.

As global prices increased by 35.5 per cent between October 2009-May 2010, India's cotton exports increased from 35 lakh bales (170 kgs each) in 2008-09 to 73.5 lakh bales in 2009-10.

While the cotton exports would come under free category (OGL), exporters would have to register their consignments with the Textiles Commissioner.

Senior officials of Commerce, Textiles and Agriculture would meet on September one to review the estimates of cotton production, demand and prices, both domestic and international. The officials may also decide upon the quantity of cotton that could be exported.

However, a report by the International Cotton Advisory Committee has said that India's cotton exports may dip by 14 per cent to 1.2 million tonnes in 2010-11 marketing year (October- September).

Industry officials said the strong domestic demand may curtail the cotton exports in 2010-11.

India's cotton production is expected to rise marginally at 5.1 million tonnes in 2010-11 against 5.01 million tonnes, while the domestic demand is estimated to rise at 4.59 million tonnes against 4.25 million tonnes.