No consensus on long-term deal yet
India has ‘promised’ to supply Bangladesh up to 20 lakh bales of cotton every year irrespective of any future ban on its exports but differences between the two countries over the mode of agreement remained, reports Indian newspaper The Hindu on Monday.
The two countries discussed the finer details of a cotton supply agreement, yet to be signed, in a meeting between the textile ministers from both sides in Delhi on Monday.
Besides, both the sides signed a textiles sector collaboration agreement aimed at strengthening the economic ties between the two nations.
‘In the 2013-14 cotton season, I have assured Bangladesh that the country’s textile mills would not have any difficulty in sourcing cotton from India,’ Indian textile minister K Sambasiva Rao said at a joint press conference after the meeting.
The two countries are yet to finalise whether the cotton supply agreement would be through a business-to-business (B2B) or business-to-government (B2G) arrangement.
While India wants it to be a B2G arrangement, with public sector procurement agency Cotton Corporation of India canalising the exports, Bangladesh wants it to be a strictly B2B affair.
‘Bangladesh feels that it is a lot cheaper to buy it from a private seller rather than a government agency and it also takes less time,’ a textile ministry official told Hindu’s Business Line.
But India’s argument is that when there is a ban on export of the raw material in the country, the only feasible way to export it would be through a canalising agency.
Both countries exchanged their final draft agreement at the meeting.
Press Trust of India, quoting Rao, reported that the final drafts had been ex-
changed between the three sides — the textiles ministry, Cotton Corporation of India and Trading Corporation of Bangladesh.
Under the draft pact, private sectors of two countries and CCI and TCB will engage in exports and imports of cotton.
‘In case of imposition of restriction on export of cotton by India at any time, the CCI and TCB of Bangladesh will determine through consultation the remaining volume of cotton exports in the season,’ said PTI report quoting a textiles ministry official.
At present, export of cotton is in the Open General Licence category with registration of export contracts by the Directorate General of Foreign Trade.
India’s cotton exports are estimated at about 100 lakh bales in the current cotton season. In the previous season, the country exported 129 lakh bales of cotton.
Indian cotton season runs between October and September.
Bangladesh has wanted to sign a cotton supply agreement with India since the country imposed a temporary ban on its exports in March last year.
As regards the textiles sector collaboration pact, it has come into effect from today and shall remain in the force for a period of five years, the official said, adding that the agreement will be reviewed on completion of every two years.
‘We have signed the textiles sector collaboration agreement which would act as a major trade facilitation mechanism, by establishing institutional mechanism for collaboration through Joint Working Group,’ Rao said.
Under the pact, India and Bangladesh would cooperate in different areas like fashion technology through exchange programmes, skill exchange through institutions and upgradation and enhancement of productivity, efficiency, management techniques and R&D.
The pact was signed between Indian textiles secretary Zohra Chatterjee and Bangladesh textiles secretary Ashraful Moqbul in the presence of textiles minister Abdul Latif Siddique and Indian textile minister Kavuru Sambasiva Rao, reports SME Times.
Also, the two sides discussed about establishment of a successor organisation for the International Jute Study Group in Dhaka through joint efforts at the UNCTAD.
India and Bangladesh together account for nearly 94 per cent of the world’s production of jute and allied fibre.
-With New Age input
