This implies that the other two systems of allotment -- new investorentitlement (NIE) and non-quota entitlement (NQE) -- will be abolishedresulting in a policy that will be easy to operate and administer.

The new policy now in the final stages of consideration will be notified bythe textile ministry next month well before the year is out to enableexporters strike deals.

To be effective from January 1, 2000, the new policy will be coterminus withthe complete phase out of export quotas by the year 2004 under multi-fibrearrangement (MFA) and will the last one as the Indian industry will beexposed to stiff global competition from the the following year onward.

The reduction in the number of systems follows the unanimous demand made bygarment makers as well as traders in order to promote better utilisation ofquotas and prevent fragmentation.

The executive committee of the Apparel Export Promotion Council (AEPC) whichdistributes the quotas has also voiced its opinion in favour of retainingonly two systems of allocation.

The garment industry has been exporting to non-quota markets notwithstandingthe NQE system. There is thus no reason why such a system should becontinued, the industry argues.

In the case of NIE system, the overwhelming view of the industry is that ithas led to misuse and therefore it must be scrapped.

AEPC had released garment export quotas remaining unutilised against NIEsystem as on September 1 under the FCFS system on October 1. The nextallocation and the last one against surrenders and flexibility providedunder the current policy will fall due on November 10.

The first instalment of 10 per cent FCFS quota for some garment categoriesagainst the annual level was released by AEPC on January 10, the second onApril 10 and the third on July 10. Under the existing policy, AEPC had madetwo such allocations earlier on April 10 and July 10.

The international trade in textiles and clothing was regulated by a specialarrangement for 40 years outside the rules of General Agreement on Tariffsand Trade. The framework of MFA applied to international trade in textilesand clothing for the period 1974 to December 31, 1994.

India has entered into bilateral agreements under MFA with the US, Canada,European Union, export to which account for a major share of total exportsof Indian textiles.

Following the establishment of the World Trade Organisation from January 1,1995, the quantitative restrictions in the bilateral agreements under MFAare being governed by the agreement on textiles and clothing contained inthe final act of the Uruguay Round negotiations.