Removal of registration rule to give cotton yarn exporters a boost

The Government’s move to abolish mandatory registration of cotton and yarn export with the Directorate General of Foreign Trade is expected to make exports more competitive and reduce transaction costs.

Globally, cotton prices have fallen sharply while it has been holding steady in India as the government has announced a remunerative Minimum Support Price to protect farmers’ interests. The imbalance in cotton prices has rendered Indian yarn exports uncompetitive as other producers are dumping yarn in the market at a lower price.

Progressive move RK Dalmia, Chairman, Cotton Textiles Export Promotion Council, said the ‘proactive and progressive’ move to remove registration requirement would reduce transaction costs for cotton yarn exporters.

It will immensely contribute to ease of doing business and simplification of procedures, he added. Exports of cotton yarn were subject to a registration procedure laid down by DGFT, under which certificates are issued by the regional offices of DGFT to the exporters of cotton yarn specifying the quantity of goods to be exported. In case the exports fall short by over five per cent of the registered quantity, then a penalty is levied on the exporter.

“Many exporters had pointed out the difficulty in abiding with this procedure. There is always a variation in weight of cotton yarn exported,” said Dalmia. Further, any delay in shipments also put exporters in quandary as there were no provisions to extend the validity of registration certificates, he said.

COMMENT NOW