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G. Srinivasan

NEW DELHI, Nov. 1

THE US has imposed an embargo on further lifting of items under Category 338 quota comprising knitwear, including shirts and blouses and cotton-knitted shirts and blouses, as the quota for this category has been fulfilled for the calendar year.

Official sources told Business Line here that thanks to the buoyancy of the Indian textile exports to the advanced countries' markets in general and the US in particular, Category 338 item quota had been overfulfilled in the first 10 months of the calendar year, amounting to 60 million pieces.

The sources said that this had also caused some inconvenience to some exporters whose orders had earlier been booked and were awaiting shipment for export.

"The fact of the matter is that there is no solution to this problem of some exporters", a senior official of the Textile Ministry said.

Asked whether there was any way by which the grievances of the exporters of Category 337 could be addressed, the sources said that the US was firm on its embargo on items for which the quota had been exhausted and the only option it gave was a costly proposition. For instance, if New Delhi is to seek additional lifting of quotas under this category, it has to surrender three times the quota for the same category from the next year's quota even as such a course would be counter-productive.

The sources said that the Textile Minister, Mr Kashiram Rana, reviewed the export performance recently with the chief executives of the various promotion councils.

Buoyed by the fact that in the first four months of the current fiscal (April to July 2002) as much as 25.6 per cent of the target of $15 billion for the whole fiscal had been accomplished, it had now been decided to revise the target to $16 billion from textile and clothing sector in the current fiscal.

The sources said that the Textile Ministry has been according various relaxations in the operation of the quota policy with a view to cutting down transaction costs and time of the exporters particularly when there is a general slowdown.

These measures include the extension of validity for use of first-cum-first-served (FCFS) quota and reduction in the earnest money deposit (EMD) rates for revalidation of the quota beyond September 30to almost half in respect of exporters who provide EMD in the form of bank guarantee, demand draft and deposit receipt.

The sources said that more textile garment and other manufacturers had been availing themselves of the technology upgradation fund scheme.

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