Textile Quota Policy To Include Electronic Transfer Scheme
The scheme is expected to make the system more transparent. The quota policy is currently being reviewed by the textile ministry and the government has set up a task force for this.
Under the proposed scheme, exporters who want to transfer a quantity from their entitlement will have to submit the offer to the Apparel Export Promotion Council (AEPC) along with the original entitlement certificate and the quantity and price at which they wish to deliver.
The Council will debit the transfer quantity on the quota certificate and return the original entitlement certificate to the transferor. The offer will be punched into the network system. A monitor in each of the AEPC offices will display the offer along with the time when the offer was punched in.
There will be a gestation period of 24 hours after the time of offer to ensure that the offer is accessible to all exporters before anybody can bid against the it.
All offers will have a validity of approximately 5 working days from the time of maturity. If no requests are entertained against an offer within 5 working days, the offer will be cancelled and the quantity will be reinstated in the entitlement of the intending transferor.
Also, the exporters will be given a chance before the beginning of every allotment year to declare their group companies by furnishing a list of not more than 5 companies along with the relationship of each of the group companies with the parent company.
Transfer transactions between any two of the group companies will be allowed outside the system during the relevant year. The policy, however, can be made applicable soon as AEPC is computerising all its offices.
Speculation also had a large part to play in the shooting up of quota prices last year on account of the frozen 30 per cent of the quota.
In certain categories, the premia had shot up by 50-60 per cent. Fast moving categories like dresses and gents shirts had even risen by 100 per cent. AEPC had attributed this rise partly to the hoarding activities of traders.