The government is set to discuss a proposal to impose 10 per cent tax on cotton exports above the declared surplus, to streamline exports and ensure a stable price regime.The ministry is also for registration of cotton export contracts with the directorate general of foreign trade, to monitor exports. The ministry wanted an inter-ministerial group to review the cotton position and make recommendations to vary or suspend the duty. However, the agriculture department was against the proposal. “The department of agriculture is clear that any sort of curb on export of farm commodity hurts the interest of growers,” a top official said.
Officials say the proposal, floated by the textiles ministry had recommended imposing the duty on the freight on board value or a maximum of Rs 10,000 a tonne, whichever is less, for all cotton exports over the declared exportable surplus. Other proposals included declaring exportable surplus in September every year, based on the estimates of the Cotton Advisory Board.
India’s cotton production in 2013-14 crop marketing year that starts from October is expected to be around 40 million bales (1 bale=170 kilograms), almost 4 million bales more than last year because of benign weather during the sowing stage.This, trade sources said will leave almost 10-12 million bales of surplus cotton of which almost 10 million could be easily exported.
Recently, textiles minister K S Rao advocated for the need to create a cotton stabilization fund. He had said that the fund would be used for the benefit of importers only and charged from surplus export. Cotton has been sown in around 11.31 million hectares, down just 0.26 per cent from the same period last year till last week in 2013-14, according to data by the agriculture department.
