Export quotas for readymade garments under FCFS okayed
S. Venkitachalam
New Delhi, Dec 29: The textiles ministry on Monday approved release of export quotas for fast and slow-moving items of ready-made garments on a first-come, first-served (FCFS) basis for 1998 calendar year.The FCFS quotas will be 10 per cent of the annual level of quotas for all categories of garments and 25 per cent in the case of category 26 pertaining to the European Union. The allotment of quotas under this category consisting of frock-type garments has been made possible because of the facility of flexibilities and surrenders available under the bilateral agreement with the EU. The quotas will be opened by the Apparel Export Promotion Council (AEPC) under the textiles ministry on January 12. The shipment period will be 75 days from the date of allotment of the quotas. AEPC sources say that applications received beyond the above date will also be considered and quotas allotted if any balance quota is left. Another installment of FCFS quotas will be released by the the Council on April 10 as per
the three-year long-term quota policy for ready-made garments that took effect from January 1, 1997. During 1997, the first tranche of FCFS quotas was released by the AEPC on January 10. For 1998, the date has been shifted to January 12, in view of the two intervening holidays on Saturday and Sunday. In the current year, FCFS quotas were released at 5 per cent of the annual level on January 10. AEPC had requested the Centre to increase the level to 10 per cent, which was rejected by the ministry. For 1998, the ministry has accepted the Council's recommendation for keeping the level at 10 per cent for release of quotas on January 10. As a result of flexibilities and surrenders under the agreement with EU , the textiles ministry has released more than 60-70 per cent of the annual level of quotas for different categories of garments during the current year.Under the existing policy, the export of quotas has been fixed at 7.5 per cent of the annual level under the past performance entitlement (PPE)
system, at 10 per cent under new investors entitlement system and five per cent under non-quota entitlement system. The policy has done away with the practice of AEPC seeking the textiles ministry's formal approval for the release of quotas under various systems.The policy itself has pre-determined dates on which quotas will be made available. This marks a departure from the previous policy which expired on December 31, 1996. The textiles ministry has ruled out the possibility of making any major changes in the policy for the year 1998 and has rejected proposals made in this regard by the AEPC and other garment exporting organisations. The council had suggested that the government restrict the number of systems under the policy to two systems -- PPE and FCFS against four at present. The council further suggested that the quotas be allocated at 70 per cent of the annual level for the PPE system and at 30 per cent of the annual level for the FCFS system against 80 and 10 per cent at present.
Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.
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