NEW DELHI — India’s ban on cotton exports has been lifted, Commerce Secretary Rahul Khullar said Monday, but he cautioned that no new export registration certificates would be issued for the next two weeks.
Political pressure, protests from ginners and international complaints caused the Indian government to reverse its decision to ban cotton exports after just a week.
“No ban, but no new certificates? It doesn’t sound like we’re really going anywhere,” said cotton farmer Rakesh Seth, who relies on exports for his business.
However, the government said a further decision would be made in the next two weeks.
“The GoM [group of ministers] is scheduled to meet within the next two weeks to assess the cotton budget afresh and take an appropriate policy view in the matter,” the ministry said.
The government also announced it will allow the cotton registered for export before March 5, about 3.5 million bales, to be cleared. More than 9.5 million bales have already been exported so far this year.
The controversial ban on the commodity’s exports came as the textile minister anticipated the need for higher cotton reserves for the Indian textile industry, which has been suffering these last years. However, Agriculture Minister Sharad Pawar protested the move, which he said was made without his knowledge, and Prime Minister Manmohan Singh stepped into the fray.
Several analysts warned that the government is being nearsighted in supporting the textile industry at the cost of cotton farmers.
“The long-term interest of the Indian textile industry lies in the availability of abundant cotton in their backyard,” said Dhiren Sheth, president of the Cotton Association of India. “Parochial measures if taken at the instance of certain sectors will only defeat the longer-term objectives of the entire cotton value chain by reducing production in the country. Any change in the policy of allowing free and unhindered exports would prove detrimental to the reputation of the country as a reliable and continuous supplier of cotton.”