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  • 6.3.3-MARKET PROFILES-NON-TARIFF REQUIREMENTS IN THE DOMESTIC MARKET

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  • Non-tariff requirements in the domestic market

    Chapter 6 - Market profiles - India 

     
     
    Cotton import procedure

    Import of commodities including cotton into India is governed by the Foreign Trade (Development and Regulation) Act 1992, the rules and orders made thereunder, and the provisions of foreign trade policy. Imported cotton is subject to the same domestic laws, rules, orders, regulations, technical specifications, environmental and safety norms as those that apply to domestically produced cotton. Imports of cotton are freely allowed in the Indian market. Normal import procedures, like those prevalent around the world, are followed in India.

    Special import regulations

    The importer’s clearing and forwarding agents have to obtain a phytosanitary certificate in the standard format as recognized by the International Plant Protection Convention. An import permit is also required to be obtained from the Indian Department of Agriculture.

    Customs procedures

    Under Section 30 of the Customs Act 1962 the importer is required to hand over an Import Manifest to the customs authorities within 24 hours of the arrival of the cotton consignment. After the customs authorities have examined the goods and assessed the duty payable, the importer makes the payment. The cotton is cleared by the customs appraiser only after payment of the duty.

    Freight forwarding and transport requirements

    Cotton containers can be delivered to any port or inland customs depot as per the customer’s requirements. The containers can also be unloaded directly at the factory premises. Mostly, inland movement of cotton is done by truck. There are no additional formalities for movement of cotton from one State to another State.

    Packaging, marketing, labelling and specific domestic business practices

    All cotton bales are processed in the ginneries and packaged with bailing iron hooks and hessian cloth, which is now being replaced by cotton cloth to avoid contamination. Bales are pressed in a standard weight of 170 kg (1 bale) and press marks are affixed on the bales immediately after pressing.

    Contract negotiation is carried out between buyer and seller through various modes of communication, including oral arrangements through telephone conversations and written communications by fax or e-mail, as well as personal visits by mill representatives to the ginneries. If the quality does not conform to the agreed parameters, discounts are determined and settled; in some cases the parties resort to arbitration.

    The cotton trade in India is still a traditional business with age-old ties still reigning supreme among a majority of the suppliers and buyers. Most supplies are on credit including financing by the suppliers. By and large, commitments are honoured by both the parties. With the cotton market getting more competitive year by year, suppliers are now under constant pressure to adhere to quality parameters and delivery schedules for healthy long-term business relations with their client buyers.