GoM discards proposal to impose duty on cotton exports

The Group of Ministers (GoM), headed by Agriculture Minister Sharad Pawar, rejected the proposal of the Textile Ministry to impose a 10% duty on overseas sales of cotton beyond the declared exportable surplus limit.
As per the GoM, there should be no restrictions on export of raw cotton and no duty on export. It advocated a free market for cotton, and was of the view that any quantitative restriction or export duty would harm farmers.
As per the Textile Ministry, it had proposed to impose the duty with a view to create a stable, transparent, production and tariff-driven cotton market to balance the interests of stakeholders in the entire value chain.
Currently, duty-free cotton exports are permitted after registering contracts with the Directorate-General of Foreign Trade (DGFT), and there is no restriction on shipments.
As per the estimates of the Textile Ministry, for the 2013-14 marketing year (October-September), the total production of cotton has been at 37-37.5 million tonnes and cotton exports at 10 million bales (of 170 kg each).
India is the world’s second largest producer and exporter of cotton. It exports more than 70% its cotton to China.

Month: Current Affairs - October, 2013