The Delhi High Court has stayed the allotment of export quotas to individual firms against the recent Directorate-General of Foreign Trade (DGFT) notification detailing the norms for shipping out 10 lakh tonnes (lt) of non-basmati rice.
“It is directed that no allotment of quota shall be made till the next date of hearing,” a division bench of the Court said in its order on Tuesday, while issuing a show cause to the DGFT for reply by August 10.
The DGFT, however, on Wednesday, went ahead with allocation of quotas to individual exporters in terms of its notification, dated July 19. The total 10 lt exportable quantity has been divided among 82 firms. The allotments, against applications invited through e-mail on July 21 and 22, were made on a first-come-first-serve basis and subject to a maximum individual quota of 12,500 tonnes.
“The DGFT has presumably not received a certified copy of the Court order, though the latter very clearly stays the allocation process,” said an exporter, who did not succeed in getting a quota.
SIMILAR SOUNDING NAMES
The list of 82 successful allottees include Adani Wilmar, State Trading Corporation of India and Marubeni India Pvt. Ltd, besides a host of firms with similar sounding names: LMJ Overseas Ltd, LMJ Commercials Pvt Ltd, LMJ Logistics Ltd, LMJ Construction Pvt Ltd and LMJ Services Ltd; LGW Ltd and LGW Industries; and ETC Commodities (India) Pvt Ltd and ETC Agro Processing (India) Pvt Ltd. All of them have bagged export quotas of 12,500 tonnes each.
The DGFT notification seeking inviting applications for export quotas had led to an estimated 1,000 intents being received within five minutes of the window opening at 1000 hours on July 21. On the whole, some 7,500 applications were received by the time DGFT closed its window the following day at 1700 hours.
The process of e-mail applications and selection of allottees on a first-cum-first-serve basis came under criticism from many exporters, especially the unsuccessful ones. The All-India Rice Exporters' Association claimed that it was prone to faulty quota allocation since the generation, transmission and receipt of applications was dependent upon server speeds and internet connection efficiencies, “which are beyond the control of the general applicant”.
According to Mr Tejinder Narang, a grain trade analyst, the major flaw in the DGFT's quota allocation process was the absence of upfront financial commitments.
“The notification gives a successful allottee three weeks to submit a bank guarantee for 10 per cent of the value of exports, whereas this should have been made a condition precedent to the allocation itself. It would have ensured participation from only genuine exporters, while keeping out non-serious players out to only sell their quotas at a premium,” he said.
In fact, the 82 successful allottees include even firms in the business of aluminium, antique arts and carpets.