Rampant illegal import of Vietnam pepper via Sri Lanka at concessional rate of duty under South Asian Free Trade Area and Indo-Sri Lanka Free Trade Agreement is hurting the Indian economy, the consortium of Indian spice traders and planters said on Friday.
Rampant illegal import of Vietnam pepper via Sri Lanka at concessional rate of duty under South Asian Free Trade Area (SAFTA) and Indo-Sri Lanka Free Trade Agreement (ISFTA) is hurting the Indian economy, the consortium of Indian spice traders and planters said on Friday. The consortium alleges imports from Sri Lanka at Minimum Import Price (MIP) of Rs 500 per kg were more than a thousand tonne in September while in October, it crossed 1,500 tonne. It is feared that it is nearly 2,500 tonne in November .
The Union government imposed a MIP for pepper at cost, insurance and insurance (CIF) value of Rs 500 per kg to protect the interests of pepper growers in December 2017. It was based on the proposal of the state-run spices board that cheaper imports of pepper is putting pressure on the domestic market.
Import duty of pepper was fixed 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 the 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 added the exporters were not only evading the import duty at concessional rate of 52% from ASEAN but even the goods and services tax at 5% is being evaded and the entire smuggled pepper is being traded in all the markets of India . The Hassan-based Consortium of Black Pepper Growers Organisations said there was similar exploitation of the Saarc agreement going on through Nepal and Bangladesh and imports have doubled after the imposition of MIP.