DGFT to approach SC over cotton export quota

The controversy over the Directorate General of Foreign Trade (DGFT) criteria for allocation of cotton export quota will now reach the Supreme Court, with DGFT proposing to appeal soon.

This follows the judgement of the Bombay High Court, which had ordered DGFT to extend the quota allocation process to August 8, which otherwise got over on July 15.

The high court had also struck down the eligibility criteria set by DGFT for getting additional export quota. The controversy relates to the registration and allocation of an additional million bales of cotton by DGFT on June 9, over and above the earlier 5.5 million bales.

DGFT has set a criteria that those exporters could get additional quota if the exporter has exported cotton in either of the two previous cotton years (October 1 to September 30) 2008-09 and 2009-10. Thereafter, allocation was done on a pro-rata basis with a ceiling of 4,250 tonnes (equal to 25,000 bales) and floor of 100 tonnes. An applicant can apply for a quantity which is the higher of its export of cotton in the two previous cotton years (2008-09 and 2009-10), subject to a quantity ceiling of 4,250 tonnes.

While striking down the criteria, the HC also ordered DGFT should receive, consider and process all applications between June 25 and July 6, while the deadline for application was set by DGFT at June 25. Those who have been allotted 100 tonnes quota will also not be allowed to process the quota till fresh allocation is done to all applicants. Officials said, by considering the applications beyond June 25, it will be unfair both to the sanctity of the deadline set by DGFT and to those who’d completed formalities by June 25.