Government warns of strict action in case of default

Even as the government opened registration for allowing export of additional 10 lakh bales, it issued a veiled threat to cotton exporters warning that those who fail to ship the quantity allocated to them within the stipulated period will be debarred from future allocations.

The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry, warned it would be forced to initiate penal action against the defaulting exporters. While initially the quota allocation was 55 lakh bales (170 kg each), the same has been increased to 65 lakh bales after additional 10 lakh bales of cotton were allowed by the government on June 8 for the current season ending September. “The exporter shall be liable to a penalty of not less than Rs.10,000 and not more than five times the value of the goods or services or technology in respect of which any contravention is made or attempted to be made, whichever is more,'' the DGFT stated.

Allocation will be made to those exporters who must have exported cotton in either of the two previous cotton years.

The data released by the Agriculture Ministry has indicated that India produced a record 33.9 million bales in 2010-11 against 24.2 million bales in the previous year. However, the Cotton Advisory Board has lowered the cotton output to 312 lakh bales in April from 329 lakh bales, mainly due to unseasonal rains in Tamil Nadu, Andhra Pradesh and Maharashtra in December last.

The DGFT has started registrations of additional quantity of 10 lakh bales of cotton exports for the current season and will accept applications till June 25.

The applications for registrations will be processed till July 5 and the quota will be allocated on July 6, the DGFT said. The exporters will be given nine days time to submit their documents starting July 7, while shipments will be completed by September 15, it said.

The allocation will be made on a pro-rata basis.

However, the DGFT tightened the norms by putting a ceiling on the application quantity of a maximum 25,000 bales.