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 marks a significant shift in India’s cotton export policy, as the central government recently allowed registration of cotton export contracts starting October 1st.

As of Saturday, the Textile Commissioner’s office has received over 996 shipments, totaling nearly 4 million bags. While registration is a prerequisite, it does not guarantee immediate shipment. Instead, obtaining an EARC ensures that the goods will be shipped from November 1st, provided they comply with the regulations that the government will announce at that time.

The government has authorized the export of 5.5 million bales of cotton starting November 1st. Before issuing permits, authorities evaluated the performance of companies to ensure reliability and compliance. Global trading giants such as Cargill, Louis Dreyfus, and Orland International have collectively secured 11% of the issued EARCs.

Bhadresh Trading Company, based in Mumbai, has taken 20% of the permits, allowing for the export of 181,000 bags, placing it among the top exporters. In Rajkot, DML Import and Export Corporation received 94,117 licenses, while Jaydeep Cotton Fibers obtained 66,423. Together, these three companies account for 40% of all export licenses.

Other notable companies include Gill Private Limited in Mumbai, which received 54,076 bales, KKM International in Mumbai with 47,058, and Calcutta-based companies that secured 44,411 bales. MEP Cotton Co. also received 44,117 permits. When combined, the top seven companies have secured 62% of the total export licenses.

Cargill India Pvt. Ltd. obtained 38,000 permits, while Orland International, based in India, received 33,823, and France’s Louis Dreyfus acquired 26,529. These figures highlight the concentration of export power among a few key players.

Industry officials note that at least 80% of India’s cotton exports are controlled by a small group of exporters. However, this system does not directly benefit farmers, as the cotton supplied to these exporters comes from merchants rather than the actual growers. This raises concerns about the fairness and transparency of the current export mechanism.