DGFT to again authorise cotton exports; revised rules coming

The Directorate General of Foreign Trade (DGFT) has taken back the power for registration, inspection and clearance of cotton exports from the Textile Commissioner under the textile ministry. DGFT works under the commerce ministry.

DGFT registers, inspects and certifies shipments. The process is mandatory for all exports. DGFT had transferred this authority for cotton to the Textile Commissioner in August this year.

“We do not have any comment to offer,” said Textile Commissioner A B Joshi. DGFT is learnt to be in the process of issuing revised guidelines for cotton exports on Monday, with two changes from the rules issued by the Textile Commissioner.

First, DGFT may allow exports strictly under letter of credit (LC) from banks, equal to the value of the export. On Friday, a trader can export in multiples of the quantity of LC from banks. Second, DGFT may reduce the period between registration and shipment from 45 days to 30 days. These were the demands of the textile industry, said a senior official of a garment export house.

With bumper cotton production on the cards, the government is considering raising the year’s export ceiling to nine million bales (a bale is 170 kg) from 5.5 million bales. This has been a demand of cotton growers, who want to benefit from high global prices. Cotton output this year is estimated at 32.5 million bales, as against 29 million last year.

With the existing registration period over on December 15, fresh registrations for exports are likely to begin soon.