Maran rules out ban on cotton export but seeks higher duty

Textile Minister Dayanidhi Maran today ruled out a blanket ban on cotton exports, but said he would press the Finance Ministry for an increase in export duty to check prices of the natural fibre.

"No, we are not for a ban. But we need some kind of calibration in exports (cotton)," Maran told reporters after releasing a booklet on the achievements of the textile sector during the one year of the UPA-II government.

However, he said that at present cotton stocks are only 34 lakh bales--equivalent to one and a half months' requirement of the textile industry, "which is a tight situation for a country like India." The new arrivals will start from September.

In view of the increasing prices of cotton in the domestic market, the government had imposed a number of restrictions on cotton exports, including levy of duty and compulsory registration of shipments.

Prices of different varieties have increased between 20-25 per cent over the last one year. To ensure further "fibre security" for the textile industry, Maran said his ministry would press for an increase in the export duty, which is Rs 2,500 per tonne at present.

He dismissed as "non-sensical" the charges  that the restrictions were anti-farmers and said that most of the stock was lying with the traders who were "lobbying" against the move.

Besides some political parties in Maharashtra, Gujarat Chief Minister Narendra Modi had also described the restrictions as anti-farmers. Whether any exception could be made in regard to shipments to Bangladesh and Pakistan, the minister said, the "L.Cs (letters of credit) would be honoured."

Pakistan authorities had written to the Indian government seeking removal of the curbs on cotton shipments to the neighbouring country.

Maran said if the steps were not taken, the Indian spinning mills would have faced a situation similar to Pakistan where a number of units had to shut down because of shortage of fibre. He said that with the help of unscrupulous traders, countries like China were exploiting the situation.