India’s
DGFT or Directorate General of Foreign Trade is in the news yet again.
The authority has been drawn to the Bombay High Court for permitting only Cotton exporters--who had carried out exports in 2008-09 and 2009-10 crop years--cotton export quota for current period as well.
The Bombay High Court has struck down this rider for 10 lakh bales of cotton exports and the government is about to file an appeal.
The DGFT also drew flak for inviting Letter of Intent from non-basmati Rice exporters with the counter being kept open for less than 48 hours. Not only that, exporters will be allowed to export only on a first-come-first-serve basis. This has spread fears that genuine exporters may lose out the opportunity to export.
The first-come-first-serve rider may invite further criticism as people who receive their quota for exports may be approached by those who lose out, with the former reaping a premium out of the deal.
The $400 Minimum Export Price also ensures not-so-serious-players furnishing export intent ultimately receiving quotas, industry fears.
Rice exportsIndia government’s decision to allow rice exports may not have come at the right time, players feel. As one industry player pointed it out, “we are not getting the right price” as the decision is a delayed one.
On July 19, DGFT issued the notification inviting Letter of Intent from interested parties to export rice.
With the All India Rice Exporters’ Association flaying the Directorate General of Foreign Trade for providing less than 48 hours for registration of Rice exports, DGFT had clarified that there is “nothing irrational” with the time frame provided.
The DGFT was not asking for contract submission but “only for Letter of Intent.”
The Letter of Intent is a testimony to the applicants’ interest in exports and given the e-mail submission option, cannot possibly raise barriers, DGFT had said, then.
For submission of contracts pertaining to exports, DGFT gives 3 weeks time starting 27th July to 18th August, DGFT Additional Director General Daya Shankar had clarified.
During the period, the selected exporters will also have to file Letter of Credit and Performance Bond as well.
Cotton ExportsWhen it came to the subject of Cotton exports, one of the industry participants, K.N.Vishwanathan of The South India Cotton Associaton replied to the question, if he is happy with the current export allocation received:
“I think the government has done whatever is possible. It is not a question of being happy or unhappy.”
He refused to comment on the export norms as floated by the DGFT when it came to cotton exports since the matter is sub-judice.
S.E Agarwal, Chairman of Capital Market Committee, ASSOCHAM said, “I am happy with the export riders as floated by DGFT.” He was responding to the question that if he was happy with the riders floated by DGFT regarding cotton and rice exports.
Source : commodityonline.com