Indian traders worry on illegal import of Vietnam’s pepper  

Dec 1, 2018

A group of Indian spice traders and planters have expressed their deepest concern over the uncontrolled and illegal import of Vietnamese pepper coming in India through Sri Lanka at lower rate of duty which falls under the South Asian Free Trade Area and Indo-Sri Lanka Free Trade Agreement damaging the Indian economy of spices.

The spice consortium claims that imports of Pepper from Vietnam via Sri Lanka at Minimum Import Price (MIP) of Rs. 500 per kg were more than a thousand ton in September, and in October it crossed 1,500 tons. And most probably, it is fear that the figure has crossed 2,500 tons in November.

To protect the interests of pepper growers in December 2017, the Union government imposed an MIP for pepper at cost, insurance and insurance (CIF) value of Rs. 500 per kg. This protection was imposed on the proposal of the state-run spices board that cheaper imports of pepper is putting excessive strain on the domestic market.

Import duty on pepper was fixed at 70% to protect the interest of the Indian farmers but concessions were granted to Sri Lanka under SAFTA, ISFTA and ASEAN agreements

Kishor Shamji, coordinator of the Kerala Chapter of Indian Pepper and Spice Traders, Growers, Planters Consortium said, “Sri Lankan government was working against the interest of Indian pepper farmers by giving Vietnam Pepper the ‘Certificate of Origin’ of Sri Lankan pepper under the guise of value addition”.

“If the Indian importer is not paying the Sri Lankan exporter the value to the tune of MIP, which means they are violating the Foreign Exchange Management Act rules and cheating the Customs by showing wrong purchase invoices at minimum import price to overcome MIP restriction for pepper import. Both ways either India is losing the foreign exchange or the MIP rules are being flouted which were implemented to protect the pepper farmers,” he said.

He emphasized that the exporters are not only dodging the import duty at discounted rate of 52% from ASEAN but even the goods and services tax which is at 5% is being evaded and the entire smuggled consignment of pepper is being traded in all the markets of India. The Hassan-based Consortium of Black Pepper Growers Organisations also expressed similar views that alike exploitation of the Saarc agreement is going on through Nepal and Bangladesh and imports have doubled after the imposition of MIP.

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