This is the second time the Commerce and Industry Ministry has been caught on the wrong foot
Prime Minister Manmohan Singh on Wednesday stepped in to put an end to the row between Union Commerce, Industry and Textile Minister Anand Sharma and Agriculture Minister Sharad Pawar by asking the Group of Ministers (GoM), headed by Finance Minister Pranab Mukherjee, to review the ban on cotton exports on March 9.
Mr. Pawar had on Tuesday complained to the Prime Minister that he was not taken into confidence on the ban issue and had come to know of it only after the Director-General of Foreign Trade (DGFT) had issued a notification on Monday. This is the second time the Commerce and Industry Ministry has been caught on the wrong foot in the last few months with an UPA ally. Earlier, the decision of the Union Cabinet to allow 51 per cent FDI in multi-brand retail had kicked up a row with the UPA ally and West Bengal Chief Minister Mamata Banerjee opposing it stating she had not been taken into confidence on the issue.
Maharashtra Chief Minister Prithviraj Chauhan and Gujarat Chief Minister Narendra Modi have also strongly opposed the export ban, pleading that this would prove to be detrimental to the interests of farmers.
Congress delegations from Maharashtra and Gujarat met the Prime Minister and sought revocation of the ban order. .
India had already exported almost 9.4 million bales of cotton this fiscal, higher than the projected export surplus quota of 8.4 million bales. Each bale is around 170 kg. Over 80 per cent of exports so far had headed for China. Exporters and traders have signed contracts for nearly 10 million bales.
The DGFT has maintained that the ban is aimed at ensuring sufficient supply of cotton for the domestic textile companies.
This is the second time in the last two years that the Commerce Ministry has banned cotton exports, a move, many said, could make international buyers nervous about sourcing from India.
The Cotton Association of India said it was shocked to hear about the ban even against past registrations.
“The registered but unshipped quantity as reported by the Textile Commissioner's office on the day of the announcement (Monday) was around 25 lakh bales,'' according to Dhiren Sheth, President of the Association.