Curbs on cotton exports to go away on Oct 1: Comm Sec

Deviating from the stand of the Textile Ministry, Commerce Secretary Rahul Khullar today said restrictions on cotton exports will be removed from October. "From October 1, we shall go to the policy of unrestricted exports," Khullar told reporters here.

He said "by and large" the Commerce Ministry tries to have a regime where exports are unrestricted.

"You do not tax exports, you do not restrict them in any way...I would have a rather an open system where nobody has to come and ask my permission or anybody else's permission for export or import," Khullar said.

The government, on May 21, imposed restrictions on exports  of cotton due to domestic supply side constraints and about 20 per cent increase in prices. Though there is no blanket ban on export of the natural fibre, the shipments have virtually halted as the government has stopped their registration, which was a pre-requisite.

Textiles Minister Dayanidhi Maran had said earlier this month that cotton exports should be calibrated in the interest of the domestic industry. "We need some kind of calibration in exports (cotton)," Maran had said. The cotton season runs from October to September.

Khullar said his ministry was also not in favour of export duties. Largely on the recommendations of the Textile Ministry, the government had also imposed an export duty of Rs 2,500 per tonne on cotton.

According to the Cotton Association of India (CAI), production of the natural fibre is estimated at 305.5 lakh bales in 2009-10 crop year.

Total cotton supply is estimated at 387 lakh bales in 2009-10, while the domestic consumption has been retained at 250 lakh bales, thus leaving a surplus of 137 lakh bales.