India's five textile companies took away export agency registration permits

Five major companies have secured 51% of the issued Export Agency Registration Permits (EARCs), enabling the shipment of 850,000 bags of cotton, with each bag weighing 170 kilograms. This allocation highlights the concentration of export capacity among a few key players in the Indian cotton sector.

The central government began allowing the registration of cotton export contracts from October 1st. As of Saturday, the Textile Commissioner’s office had received a total of 996 shipments, amounting to nearly 4 million bags. However, it's important to note that merely registering a contract doesn't guarantee immediate shipping.

Obtaining an EARC ensures that the goods will be shipped starting November 1st, but exporters must comply with any new regulations that may be introduced by the government at that time. This creates a level of uncertainty for businesses as they prepare for the upcoming season.

The government has authorized the export of 5.5 million bales of cotton from November 1st. Before issuing permits, authorities reportedly evaluated the performance of certain companies to ensure reliability and compliance with export standards.

According to data from the Textile Commissioner’s Office, global trading giants such as Cargill, Louis Dreyfus, and Orland International have collectively secured 11% of the issued EARCs. These international players continue to play a significant role in India’s cotton trade.

Bhadresh Trading Company, based in Mumbai, holds 20% of the permits, allowing them to export a total of 181,000 bags, placing them among the top exporters. Meanwhile, DML Import and Export Corporation in Rajkot has received 94,117 licenses, and Jaydeep Cotton Fibers, another Rajkot-based firm, has obtained 66,423 licenses. Together, these three companies account for 40% of the total export permits issued.

Other notable companies include Gill Private Limited in Mumbai, which received 54,076 bales, and KKM International in Mumbai, which secured 47,058 bales. In Kolkata, MEP Cotton Co. received 44,117 bales. When combined, these four companies make up a significant portion of the market, and when added to the top three, the top seven companies now hold 62% of all export licenses.

Cargill India Pvt. Ltd. has obtained 38,000 permits, while its Indian branch, Orland International, and the French company Luis Dover have secured 33,823 and 26,529 bales respectively. These figures underscore the dominance of large corporations in the export process.

Indian textile industry officials have pointed out that at least 80% of cotton exports are controlled by a small group of exporters. This concentration raises concerns, as the benefits of these exports do not directly reach the farmers. Instead, the cotton sold by these exporters comes from merchants, not the actual growers, leaving the agricultural community largely unaffected by the profits generated from international trade.