The government has partially lifted curbs on cotton exports from July 2 allowing only registered exporters to ship overseas as domestic prices of the commodity are stabilising.
?There are no restrictions now? restrictions have been removed from Friday as prices have now stabilised,? textile secretary Rita Menon said on Wednesday.
Domestic prices of cotton have risen 30% since the beginning of the year to Rs 29,000 a candy (356 bales), forcing government to impose restrictions on cotton exports in April to help the labour-intensive domestic textile industry.
?Domestic prices have now stabilised at Rs 29,000-30,000 a candy. We have decided to allow all registered exporters to ship the commodity,? Menon said. She, however, said no fresh registrations will be allowed before the new cotton crop year beginning October 1.
Menon said the government will set the size of the cotton to be exported every year hereafter so both exporters and domestic textiles industry do not suffer.
Before the next season starts October 1, the government will announce the volume that can be exported, commerce secretary Rahul Khullar had said earlier in the month.
He said cotton exports will be unrestricted and there will be no tax on them.
The quantity available for exports and domestic consumption will be set by a collegian of secretaries of agriculture, textiles and commerce. In April, the government banned exports of raw cotton but protest from farm lobbies led to revoke of the ban.
However, duty was imposed on cotton exports and they were regulated.
There was 15-20% shortage in global cotton production, which led to unusual increase in prices.
However, in 2009-10, India had good crop and produced 29.2 million bales cotton, 200,000 bales more than the previous year. The country is the world?s second largest supplier of cotton. It is also a major consumer with a large domestic textile industry.