A 10 per cent increase in pepper imports from Sri Lanka in December has left the Indian domestic pepper industry worried, especially at a time when there is a shortage of containers and vessels.
“In December 2020 alone, 822 tonnes of pepper were imported against 80 tonnes in December 2019. The imports came at eight per cent customs duty from Sri Lanka under the SAFTA (South Asian Free Trade Area) and duty-free under ISFTA (Indo-Sri Lanka Free Trade Agreement) with license from the DGFT (Directorate-General of Foreign Trade,” said Kishor Shamji, Indian Pepper and Spice Traders, Growers, Planters Consortium (IPSTGPC) Coordinator.
All imports were made under the DGFT stipulation that the minimum import price (MIP) should be Rs 500 a kg. India levies zero duty on the import of pepper from Sri Lanka, with a cap of 2,500 tonnes. Anything above that is charged eight per cent duty as per SAFTA. Pepper imports below Rs 500 are allowed under advance authorisation scheme for 100 per cent export-oriented units and those functioning in special economic zones to meet the needs of the oleoresin industry.
Pepper is also allowed to be imported at 51 per cent customs duty under an agreement with the Association of South-East Asian Nations (ASEAN) from January 1, 2019 against the earlier duty of 70 per cent.
“It is surprising that pepper imports continue to be higher during a year in which the novel coronavirus (COVID-19) pandemic has affected trade. The imports have come despite problems at ports and container shortage,” said Bose Mandanna, former Coffee Board Vice-chairman and coffee estate owner.
Coffee growers like him cultivate pepper as an intercrop on their estates.
According to IPSTGPC, the use of imported pepper in the domestic market increased 30 per cent last year compared with 2019. “Pepper imports under SAFTA and ISFTA increased to 4,019 tonnes from 3,114 tonnes, though all were shipped into the country at the Rs 500 a kg MIP.
Overall, pepper imports increased 2.5 per cent last year to 22,071 tonnes from 21,518 tonnes the previous year, Shamji said.
The other problem with these imports is that Vietnam pepper is being brought into the country under the garb of Sri Lankan pepper.
“Pepper consignments from Vietnam come into India with fake Sri Lanka certificates of origin. These come without any change in the HSN (harmonised system of nomenclature) code that classifies goods from Vietnam,” said CGPO’s Vishwanath. A change in HSN is required to show that value-addition has been done to a product. Pepper imports from Sri Lanka will qualify for concessions under SAFTA and ISFTA only if they have the certificate of origin. “Importers came up with another strategy of producing fake bills of lading as if the consignment left Sri Lanka ports when actually they would have come from Vietnam,” he said.
Vishwanath said one way of tackling the imports would be to strictly ensure that the consignments brought into the country adhered to the six per cent piperine content.
Pepper is imported duty-free by the oleoresin industry, which says the lower oil content of the Indian varieties made them unsuitable for it. It contends that Indian pepper is harvested only after the berries mature.
On the other hand, Sri Lanka and Vietnam harvest immature berries that reportedly have the required oil content.
Shamji, however, said Indian pepper had a higher oil content of more than six per cent and was suitable for the oleoresin industry. The oil content of Vietnamese pepper is below five per cent.
- Moneycontrol.com
