World Trade Organization Organisation Mondiale du Commerce Organización Mundial del Comercio

Reply: No such ban on exports by the State Government is in operation.

US FQ 25:

(on US 67)

Report by the Secretariat (WT/TPR/S/249): III. TRADE POLICIES AND PRACTICES BY MEASURE: (3) Measures Directly Affecting Exports: (v) Export prohibitions, restrictions, and licensing: Page 79, paragraph 140:

The Secretariat's report states that "export licensing is sometimes used as a policy tool to ensure the domestic supply of certain products." For example, at different periods in 2010, certain exports of cotton (HS 5201, 5202, and 5203), excluding cotton yarn, (HS 5205, 5206, and 5207), were restricted by an export license or by an export authorization registration certificate that was issued only after the domestic supply of cotton was ensured for the domestic garment and handloom sectors. We understand that the restrictions on the export of cotton have been lifted.  Please explain the rationale for these export restrictions, particularly in light of India's commitments under Article XI and Article XX of the GATT. Also, please indicate whether these restrictions had the intended effect, and whether or not the Government plans to reinstate the restrictions at the start of the new cotton season in October?

Reply: The restriction on export of cotton was imposed temporarily as allowed under Article XI of GATT. Government policy on cotton exports is guided by the consideration of permitting export of surplus cotton from India. Accordingly, exportable surplus is determined from time to time and allowed to be exported either by placing cotton exports under free list or by way of quotas. Export of cotton has been made free for the cotton year 2010-11 (up to 30.09.2011) vide DGFT Notification No. 62 dated 02.08.2011, which is available in the website dgft.gov.in. It is only subject to registration of contracts for export of cotton with the Directorate General of Foreign Trade.

U.S. Follow-Up Question: Please explain the specific provision of Article XI that, in India's view, justified the previous cotton export restrictions. Can India confirm that no export restrictions are applied to cotton for the 2011-2012 season?

Reply: Such short term measures are covered under paragraph 2 of Article XI of GATT, 1994. Export of cotton was made free for the cotton year 2010-11 vide DGFT Notification No. 62 dated 02.08.2011 and now export of cotton for the cotton season 2011-12 also has been made free vide DGFT Notification No. 74 dated 12.09.2011. It is only subject to registration of contracts for export of cotton with the Directorate General of Foreign Trade. These notifications are available in the website dgft.gov.in.