New Delhi: The commerce ministry has decided to denotify three PSUs — MMTC, STC and PEC — as canalising or nominated agencies for imports and exports of goods like high-grade iron ore and precious metals and is also considering their closure. After denotification, these companies will no longer remain canalising agencies for import and export of goods for the government.
According to an office memorandum of the ministry, the utility of these undertakings — MMTC, STC and PEC Ltd — has been examined and it has been decided that there is no need for any canalising agency in the department of commerce.
"…. Wherever required, line ministry can nominate their PSUs (Public Sector Undertakings) etc. as a canalising agency," it said.
Under the current foreign trade policy (2015-20), there are seven nominated agencies for import of precious metals and that include four from the department of commerce — MMTC, STC, PEC Ltd and STCL Ltd.
"It is also relevant to mention here that keeping in view the guidelines of Department of Public Enterprises on New Enterprise Policy for CPSEs in the non-strategic sector, the proposal for closure of MMTC, STC and PEC is under consideration," it said.
Cabinet had approved closure of STCL, subsidiary of STC, in 2013 and its winding up petition is pending in the High Court of Karnataka.
"DGFT is requested to de-notify MMTC, STC, PEC and STCL Ltd as canalised agencies/nominated agencies for all businesses in the EXIM (export-import) policy so that buyers/sellers can be informed suitably," the memorandum added.
State Trading Corporation (STC), Project & Equipment Corporation of India (PEC) and Metals & Minerals Trading Corporation of India (MMTC) are under the administrative control of the ministry.
MMTC and STC were created in 1963 and 1956, respectively. PEC Ltd was carved out of the STC in 1971-72.
MMTC was a canalising agency for import and export of high grade iron ore, manganese ore, chrome ore, copra and red sanders and import of precious metals.
Similarly, STC was a canalising agency for imports of essential items of mass consumption such as wheat, pulses, sugar and edible oils.
PEC was engaged in export and import of machinery and railway equipment.
After liberalisation, said an observer, the government de-canalised various items and now these state-owned firms which were set up as a specialised trading arm of the government lost their relevance.