India's cotton export ban lifted under political pressure

New Delhi, Mar 12 (PTI) In a U-turn, the Indian government today lifted the ban on cotton exports under immense political pressure, within days of prohibiting shipments of the natural fibre. However, it will take some time before exports resume, as the Commerce and Textiles ministries will "scrutinise and revalidate" the registrations and submit their report to a high level Group of Ministers (GoM), expected to meet within two weeks. The Directorate General of Foreign Trade withdrew its March 5 notification that had prohibited cotton exports. "The ban stands lifted as of this morning. There are huge bunches of registrations; those would be scrutinised and revalidated," Commerce Secretary Rahul Khullar said. But no new export registrations would be done until the existing entitlements are revalidated, he said. Of the total registrations of 13 million bales before the ban, 3.5 million bales are yet to be shipped and these would be scrutinised. "Scrutiny and revalidation is to make sure that there is no fictitious transaction," he said, adding that the parameters to check the veracity of RCs would be decided by Commerce and Textile ministries. The decision follows a meeting of the GoM, headed by Finance Minister Pranab Mukherjee, on March 9, which took place in the wake of Agriculture Minister Sharad Pawar's protest over the export ban. Some Chief Ministers including from Congress-ruled Maharashtra and BJP-ruled Gujarat had also conveyed their resentment over the move, stating it would hurt farmers. Early last week, the Textile Ministry had said the ban was imposed after taking into account the trend of domestic consumption and depletion of domestic availability. India, the world's second largest cotton producer, had exported 8.8 million bales of 170 kgs each in fiscal 2007-08, 3.5 million bales in 2008-09, 8.3 million bales in 2009-10 and 7.8 billion bales in 2010-11. This year, before the ban was imposed, export contracts of about 12.0 million bales had already been registered of which 9.4 million bales had been shipped. PTI