The domestic cashew industry had wind-swept Vietnamese competition in 2014 -15 on its own strength. But resultant to the ASEAN agreement, low quality broken kernels are finding their way into the domestic market, broken kernels are mixed in husk and smuggled in, and HS Code of Raw Cashew is used to import at low duty by traders.Imports during April-December 2017 were over five lakh tonnes (lt) valued at ₹7,325 crore.
Because of thisImport of inferior cashew kernels from Vietnam have to be stopped and policy loopholes plugged to protect the ailing domestic cashew industry.
These issues have been highlighted in the revival package sought by the Cashew Export Promotion Council of India (CEPCI) to the Centre for the resurgence of the crisis-ridden industry.
CEPCI, as a short-term measure, has urged the government to impose a complete ban or imposition of 100 per cent duty with increased MIP as well as inclusion of cashew husk imports under the negative list.
The import duty on raw cashew nuts should be brought back to zero per cent as earlier to help small non-exporting units. Such gestures should be continued till self-sufficiency is attained in domestic production. Suggesting mechanisation and automation as a long-term solution, the Council pointed out that this was the reason Vietnam was able to procure raw cashew nuts at high price. The mechanized units process 80 kg cashew for ₹1,300-1,500 while manual units do it at ₹3,000-4,000. The government should promote mechanisation by extending soft loans that will help in scaling up production and open more job opportunities.
Cashew plantations have to be promoted across the country to reach self-sufficiency in raw material. The raw cashew production in India is 700,000 lakh tonnes against the requirement of 1.6 lakh tonnes inviting an import of 900,000 tonnes. CEPCI cited this as the main reason for the present crisis of the industry.
The revival package also emphasised the need for a special economic package and reinstating the five per cent export incentives to bring in additional operational capital.