India’s cashew processing industry has raised a red flag over a sharp rise in illegally imported cashew kernels, warning that the trend is distorting markets and threatening the long-term viability of domestic processors.
The All-India Cashew Association (AICA) said it has observed a growing volume of cashew kernels entering the country through mis-declared import channels, allowing traders to evade applicable customs duties. According to industry sources, plain cashew kernels—used as the base raw material for a wide range of value-added products—are being falsely declared under categories that attract significantly lower or zero import duty.
Industry executives said some shipments are being labelled as roasted cashews, animal feed or cashew husk at ports, enabling clearance at reduced duty rates. Once inside the country, these consignments are allegedly redirected into the regular commercial market, undercutting legally imported and domestically processed cashew products.
The development comes at a challenging time for the sector, which is already facing tight margins amid rising costs and stiff competition from global suppliers. India is among the world’s largest processors and consumers of cashews, but industry players say the influx of cheaper, mis-declared kernels is depressing prices and placing compliant processors at a disadvantage.
“This kind of trade malpractice creates an uneven playing field,” industry experts said, adding that domestic processors who follow regulations and pay full duties are being squeezed by illegally priced imports. If the practice continues unchecked, they warned, it could weaken the domestic processing base and disrupt the entire cashew value chain, from sourcing to employment.
In response, AICA has urged the central government and customs authorities to strengthen monitoring at ports, improve inspection mechanisms and ensure accurate application of Harmonized System of Nomenclature (HSN) codes. The association has also called for stricter penalties against importers found guilty of mis-declaration.
With cashew prices highly sensitive to supply shifts and imported volumes showing an upward trend, industry bodies say closer coordination between policymakers and enforcement agencies will be critical to prevent further damage to India’s cashew processing sector and to preserve fair competition in the market.