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), which allows them to ship a total of 850,000 bags of cotton, each weighing 170 kilograms. This marks a significant step in India’s cotton export strategy as the government begins to regulate and manage the flow of cotton to international markets.

The central government officially allowed the registration of cotton export contracts starting October 1. As of Saturday, the Textile Commissioner’s office had received a total of 996 shipment applications, amounting to nearly 4 million bags of cotton. However, it's important to note that registration alone does not guarantee immediate shipping. Instead, obtaining an EARC ensures that the goods will be shipped from November 1st, subject to compliance with any regulations that may be issued by the government at that time.

Earlier this month, the central government approved the export of 5.5 million bales of cotton starting from November 1. Before issuing these permits, authorities carefully evaluated the performance of each company to ensure they were capable of meeting export obligations efficiently.

According to data released by the Textile Commissioner’s Office, global trading giants such as Cargill, Louis Dreyfus, and Orland International have collectively secured 11% of the issued EARCs. Meanwhile, 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 the sector.

DML Import and Export Corporation from Rajkot received 94,117 export licenses, while Jaydeep Cotton Fibers, another Rajkot-based firm, obtained 66,423. Together, the three companies accounted for 40% of the total licenses issued. Other notable recipients include Gill Private Limited in Mumbai, which received 54,076 bales; KKM International in Mumbai with 47,058; and Kolkata-based companies that received 44,411 bales. MEP Cotton Co. also secured 44,117 permits. When combined, the top seven companies have received 62% of all export licenses.

Cargill India Pvt. Ltd. has obtained 38,000 licenses, while its Indian branch, Orland International, and France’s Luis Dover received 33,823 and 26,529 bales respectively. These figures highlight the concentration of export power in a few key players within the industry.

Indian textile industry officials have pointed out that at least 80% of cotton exports are controlled by a small number of large exporters. This concentration raises concerns, as the benefits of these exports do not directly reach the farmers. Instead, the cotton is sourced from merchants rather than directly from the growers, limiting the economic impact on rural communities.