LAHORE – All Pakistan Textile Mills Association (APTMA) Chairman Gohar Ejaz expressed serious concerns over delaying tactics used by the Indian government with regards to the shipment of one million cotton bales to Pakistan and termed it a contravention of the free market system. It may be noted that the Indian government’s interference in the free market has already drawn heavy criticism from the international community.
He went on to say that India has produced 32.5 million cotton bales this year with a growth of 10 percent comparing to last year’s output. However, he added that the Indian government through the vide Notification No 12(RE-2010)/2009-14 dated December 16, 2010, has made amendments in earlier notifications to distort the free market mechanism. According to the amendment, the contracts for export of cotton shall be registered with the Directorate General of Foreign Trade prior to shipment. Additionally, clearance of cotton consignments by Customs would be completed after it has been verified that the contracts have been registered.
He termed it an irony that the Indian Ministry of Commerce and Industry has declared that the modalities of registration for export of cotton would be notified separately, once the balance quantity of cotton, remains to be exported, is ascertained. The chairman indicated that the sudden intervention to the free flow of trade by the Indian government has held up one million cotton bales owed to Pakistani importers, who had entered into agreements with Indian cotton exports well before the controversial notification. He said the controversial notification was tantamount to Indian cotton exporters backing out of from their commitment with Pakistani cotton importers.
The APTMA chief pointed out that the Indian government has also hurt cotton growers by this intervention, simply to support its textile industry procuring cotton at 30 percent less than international price. He also expressed his wonder at the apparent hypocrisy of the Indian government which can negotiate with the European Union for market access in the form of Free Trade Agreement (FTA) while simultaneously disrupting the international trade mechanisms in its backyard.
He said the EU has already imposed an anti-subsidy duty on India for introducing, besides other subsidies, the Technology Up-gradation Fund Scheme (TUFS) and disbursement of hundreds of billions of rupees for subsidised investment in the textile sector. The latest intervention to the free market mechanism on cotton trade may also encourage further duties on Indian products in the EU and the US, he added.
