Export sops for cotton, yarn restored
The government today announced restoration of incentives on export of cotton and cotton yarn following a sharp fall in domestic and international prices of the commodities.
July 26, 2011 / 17:19 IST
The government today announced restoration of incentives on export of cotton and cotton yarn following a sharp fall in domestic and international prices of the commodities.
The decision to restore the Duty Entitlement Pass Book (DEPB) scheme on cotton yarn would be on a retrospective effect basis from April 2011 and on cotton from October 2010, Commerce and Industry Minister Anand Sharma said."I have taken a composite review of cotton and cotton yarn industry over the last few days. Both of these segments have faced huge fluctuation in the international and domestic prices," said Sharma, who also holds the charge of the Textiles Ministry.He said the government policy has been calibrated over the last one year. Cotton yarn has been placed on Open General Licence (OGL) for exports from April 2011. Therefore, the DEPB, tax refund scheme for exporters, has been made effective from that date.The government had withdrawn the tax refund benefit on cotton and cotton yarn in April last year. Welcoming the move, Confederation of Indian Textiles Industry said that it will give relief to the cotton yarn sector as it was making losses due withdrawal of export incentives and had huge inventories.Exports of cotton were disincentivised by virtue of export tax, following a sharp rise in prices in January,2011. With easing of export curbs, the DEPB has also been restored. Prices took a reverse turn by end of March and fell sharply both in the global and domestic market.However, export restrictions remain on export of cotton, which can be exported up to 65 lakh bales this year. After peaking at Rs 62,500 per candy (356 kg) in March-end in the domestic market, cotton prices have crashed to Rs 31,000 per candy now. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
