New export taxes hurt cotton traders

RAJKOT - The cotton traders here are incurring heavy losses following a new license regime imposed on cotton exports by the Central Government.

The Government imposed a heavy duty on cotton exports, followed y a total ban on export, which was later revoked. The Government hen implemented a new license

The traders complained that the government has not made rules and regulations clear, as a result of which exporters and ginners are confused and are suffering heavy losses, as most ginning units have come to a standstill.

At present, cotton stocks that have not been exported are 1 million bales, which have a market price of more than Rs 100 billion. The stocks have been held back, as they were registered for export as per the earlier license.

Secretary of Saurashtra Ginners’ Association (SGA) Anand Popat said a total of 8.5 million bales were registered for export out of which 7.3 million were already shipped, but the remaining bales have been held back because they have to now adhere to the guidelines of the new licensing system.

“An order of around 12 lakh bales of cotton is still lying pending, and around 85 lakh bales have been registered with the textile commissioner, out of which 7.3 lakh bales have been shipped,” said Popat.

“If we are not able fulfill the contract, the goodwill of the Indian merchants would suffer. Next time no buyers from abroad will trust us or give order in future. The goodwill and credibility of India would suffer in international markets due to the unfulfilled export order,” he added.

President of Saurashtra Ginners’ Association Bharat Vala said the Government needs to permit fulfillment of pending orders that already have the Export Receipt Certificate (ERC) and are waiting at ports for shipping.

“Our cotton is the cheapest cotton but when we made the registrations, there was no duty imposed, but now the government has imposed Rs 2,500 per tonne, which comes to around Rs 900. So, today if an exporter has to export, his cost price would be Rs 31,000, and he would have to bear immense loss,” said Bharat Vala.

“Due to the new licensing, small-scale exporters will suffer and they may depart from the business altogether,” he added asserting that the farmers will not receive end benefit of high international prices. (ANI)