INDIA: Govt provides additional benefit for cotton exports
In a bid to appease cotton farmers and traders, the govt has provided an additional benefit for cotton exports.
The sensitive commodity has been added to the list of products which enjoy special benefits under the Visesh Krishi and Gram Udyog Yojna which promotes export of farm products.
This is a u-turn from the situation last year when spiralling demand had resulted in calls for discouraging exports.
Reacting to the export concessions provided by the government, the Directorate General of Foreign Trade (DGFT) said, "This is election season when promotion of farm products gets priority. Therefore, the govt has decided to provide 5% duty credit to cotton exporters. This means that any company exporting Rs 100 crore worth of cotton would be entitled to import duty-free goods attracting customs duty of Rs 5 crore. The govt is also procuring cotton through the Cotton Corporation of India and subsidy is being provided for this purpose. Officials feels that these moves would ensure that price of cotton in the Indian market would not decline despite a significant dip in demand."
Added: February 19, 2009 Source: Agencies