India has promised to supply Bangladesh up to 20 lakh bales of raw cotton every year irrespective of any future ban on its exports.
The two countries discussed the finer details of a cotton supply agreement, yet to be signed, in a meeting between the Textile Ministers from both sides on Monday.
“In the 2013-14 cotton season, I have assured Bangladesh that the country’s textile mills would not have any difficulty in sourcing cotton from India,” Textile Minster K. Sambasiva Rao said at a joint press conference after the meeting.
However, the two countries are yet to finalise whether the cotton supply agreement would be through a business-to-business (B2B) or business-to-Government (B2G) arrangement. While India wants it to be a B2G arrangement, with public sector procurement agency Cotton Corporation of India canalising the exports, Bangladesh wants it to be a strictly B2B affair.
“Bangladesh feels that it is a lot cheaper to buy it from a private seller rather than a Government agency and it also takes less time,” a Textile Ministry official told Business Line .
But India’s argument is that when there is a ban on export of the raw material in the country, the only feasible way to export it would be through a canalising agency.
Bangladesh has wanted to sign a cotton supply agreement with India since the country imposed a temporary ban on its exports in March last year.
The two countries signed an MoU on textiles sector collaboration that would act as a trade facilitation mechanism for putting in place an institutional mechanism for collaboration through a joint working group. The group will develop collaborations between fashion institutes, skill-building institutions and research institutions in the two countries.