Madan Jain, president, All India Garment Exporters And Manufacturers Association (AIGEMA) endorses the same viewpoint saying that there will be spate of speculative applications for quota even from exporters who have no confirmed orders and will lead to cornering of quotas by exporters having house to house business. This will kill the very spirit behind the FCFS scheme, says Jain.

Such a situation will inflate demand, raise cut-off prices, create artificial scarcity of quota and increase their prices and all this would be detrimental to thegrowth, laments Madan Jain.

According to Premal Udani, president of CMAI, the textile ministry had introduced the electronic transfer system (ETS) with a view to bring about greater transparency and curb speculative tendencies in the garment trade and now removal of the L/C clause will negate all these efforts.

What surprises the exporters is that none of the garment trade associations ever made such a demand and yet the government took such a drastic step and without even consulting these associations.

Perhaps it was the bureaucratic slip in interpreting the suggestion made by the executive committee of Apparel Export Promotion Council (AEPC) to remove the condition of L/C for application of FCFS quota which are available only after clearing all the first day applications on FCFS opening dates. This is because quotas in demand are consumed on the very first day even with the L/C stipulation. Instead, the ministry of textile went ahead and scrapped the L/C requirement all together.

AIGEMA feels thismove is retrograde and unwise and will affect garment industry adversely. AIGEMA, therefore, called upon the ministry to withdraw its decision and restore the status quo to ensure that only genuine and bonafide exporters having orders backed with L/C will only be able to apply for quota. The CMAI too strongly urged the ministry to reintroduce the L/C clause under the FCFS system in the genuine interest of the garment exports.