-The Economic Times
India has lifted the week old ban on cotton exports following intense political protests, but stiff riders have been put in place to discourage overseas hoarding.
Exports will be allowed only of consignments that had been registered before the ban after scrutiny and revalidation to eliminate “fictitious” transactions while issue of fresh registration certificates has been put on hold. The group of ministers headed by finance minister Pranab Mukherjee, that decided to remove the ban last Friday will meet again in two weeks to review the situation.
"It has been decided that all valid registration certificates for exports will be scrutinised and re-validated as there has been huge bunching of these in January and February," commerce secretary Rahul Khullar said, adding that when such bunching happens it is likely that speculative trading is taking place.
Registration increased to 44 lakh bales in February and 28 lakh bales in January, compared to 15 lakh bales in December, 23 lakh bales in November and 13 lakh bales in October.
"We will double check whether these transactions are for real, or are they just fictitious," Khullar said. The commerce secretary, however, did not elaborate on what would determine a transaction as fictitious.
"We are yet to decide on that. Obviously, we cannot be penalising valid transactions or we would be hauled to the courts by the affected party," he said. No new registration certificates will be issued till the matter at hand is sorted out, Khullar said. The GoM will then review the situation and take a call on what is to be done.