The textile ministry does not see any justifications for continuing with the quota regime and wants it to be removed in the new policy pointing out that raw cotton imports are already under OGL. Moreover, the new national textile policy unveiled by textile minister Kashi Ram Rana recently advocates a free trade regime, officials pointed out.

Raw cotton imports have been placed under OGL since April 1994 to enable mills to procure raw material at competitive prices. Effective from past fiscal however, these imports have been subject to 5.5 per cent duty and registration of contracts have been made compulsory.

Export quotas released at the beginning of every season takes into account the domestic availability and price trends both at home and abroad. Actual exports however depend on a number of factors and in fact the quotas have remained unutilised during the past three years.

In its suggestions to the new Exim policy, the textile ministry does not however seek any changes in the export promotion capital goods (EPCG) scheme. It allows imports of new capital goods at a uniform customs duty of 5 per cent against an export obligation equal to five times the CIF value of these goods to be fulfilled in a period of eight years.

In the current Exim policy, seven items of trimmings and embellishments, namely labels, tags, stickers, buttons, printed bags, belts and hangers are allowed duty-free imports by the ready-made garment exporters. The revenue department has also agreed to extend this facility for imports of all types of fasteners and polywadding.