QUOTA & LIASION
  - Quota
  - Quota Distribution
  - Past Performance Entitlement System
  - First Come First Served (FCFS) System
  - New Investors Entitlement (NIS) System
  - Non-Quota Exporters Entitlement (NQE) System
  - Annual Quota Levels
   

QUOTA

Quantitative restrictions (quota) apply on apparel exports from India to the US, Canada, Norway and the European Union. These restrictions would apply till the gradual phase out of MFA (Multi Fiber Agreement) by year 2005.

21 Garment categories come under specific restrictions to the US and 44 other categories are subject to overall group limits. Canada has quotas on 9 garment categories and Norway on one. The European Union imposes quota on 10 categories. The annual levels of each quota category is listed below Apparel Export Promotion Council is the agency distributing and administering apparel quotas.

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QUOTA DISTRIBUTION
India has a very rational policy towards distribution of quota. The new garment Export Entitlement Policy stipulates the distribution of annual levels of quotas in the following manner:
Past Performance Entitlement (PPE) System
First Come First Served (FCFS) System
New Investors Entitlement (NIS) System
Non-Quota Exporters Entitlement (NQE) System
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Past Performance Entitlement System
75% of the annual level is distributed under this system
Exporter is entitled to quota (for a country-category) on the basis of value of exports in that country-category in the year preceding the previous year, i.e. 1998 for quota entitlement in 2000
Pro-rata allotment of available levels on the basis of value
Exporters having F.O.B.’s (in 1998) higher than national average (for a category) are entitled to additional quota for which a pool of 5% is reserved

Shipments to be made between 01st January to 30th September. Quota can be transferred before 20th September (if applied). Only 50% (of allocation) can be transferred after 30th May. Validity can be extended to 31st December on the basis of confirmed export order

The quotas are generally traded through brokers specializing in the same. The premiums fluctuate depending on demand & availability of quota
To bring in transparency in quota trading, A.E.P.C. has introduced an on-line electronic transfer system
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First Come First Served (FCFS) System
10% of the annual level distribution
Allocation based on F.O.B. value of confirmed export order supported by L/C. Exporters having higher F.O.B. bid get quota
5% released on 10th January & 5% released on 10th April
Unutilized, unallocated quota (from other distribution systems) released on 10th July & 10th November
FCFS quotas are NON-TRANSFERABLE
Valid for 75 days from allotment
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New Investors Entitlement (NIS) System
10% of the total annual level
Provided to encourage new investments in plant & machinery
Allotment based on investments made in new machinery made during 12 months commencing not earlier than the 1 st of JANUARY 1997 (for allocation for 1999)
Exporters to invest a minimum of Rs. 5 Million
Choice of applying for specific quotas given to exporters
NIE quota is transferable (to be referred to as NIT after transfer). Other terms and conditions including transferability will be the same as applicable under the PPE system.
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Non-Quota Exporters Entitlement (NQE) System
5% of the total annual level
Provided as incentive to export non-restrained items
Allocated to exporters of garments to non-quota countries (other than US, EU, Norway & Canada) & not covered under restraints (in quota countries)
Exports should have been in free currency & over Rs. 1.50 Million
Exports of 1998 to be taken for allocation in 2000 Choice of applying for specific quotas given to exporters
Distribute pro-rata on the basis of value of exports
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