India removes export quotas for cotton yarn

India removes export quotas for cotton yarn

As a first positive step towards removing significant export restrictions for cotton and cotton products, India has put an end to its export restrictions for cotton yarn. The export of cotton yarn had been restricted by quantitative limits since 22 December 2010 with the level being fixed at 720 million kilograms for the financial year 2010-11. Export restrictions on cotton and cotton products are of great concern to EU industry as such measures have been tremendously aggravating the global upward price spiral and significantly distorted the security in supply. As India is one of the main EU import sources for cotton products, these measures have seriously affected EU industry.

The European Commission has raised these concerns with India at many different occasions, including at Director General level. The EU Delegation in Delhi had several meetings with the relevant Ministries to set out the EU’s concerns on the Indian measures. On 31 March 2011, the Indian Government published a notification (No. 49 (RE-2010)/2009-14) removing the restrictions on export of cotton yarn with effect from 1 April 2011. Export contracts will still have to be registered with the Directorate General for Foreign Trade.

However, the quantitative restrictions on raw cotton remain in place (5.5 million bales for 2010/11). The Commission, and in particular the EU Delegation in Delhi, will monitor any new developments very closely and will continue to raise this issue with India at all appropriate occasions.

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