GST brings Bhutan's cardamom exports to India to a halt

  • 27-Nov-2018
  • GST brings Bhutan's cardamom exports to India to a halt

Bhutan’s exports of cardamom to India have come to a halt due to knots in Indian official formalities, leading to large-scale illegal cross-border trade. As a way out, Bhutan has requested India to bring the widely-used spice out of GST purview. 

The reversal began when India put GST in place in July 2017, with the new regime bringing the Rs 65-crore trade to a complete halt. 

A low-key matter till now, it has now reached diplomatic level. In a recent meeting with Indian foreign secretary Vijay Keshav Gokhale, foreign minister of Bhutan Dr Tandi Dorji requested for exemption for the product. 

Following GST introduction, customs department now follows new system that includes Indian e-Payment Gateway ICEGATE in all Indo-Bhutan border gates. The system demands exporters to produce Plant Quarantine Services of India (PQSI) certificates for items to be exported to India. Bhutan is not included in PQSI list. 

Moreover, the system does not recognize BAFRA, (Bhutan Agriculture and Food Regulatory Authority) that issues quality certificate to exporters in Bhutan. 

"Indian customs has stopped allowing our consignments, bringing exports to a halt," said Sonam Togbey, an exporter from Bhutan. "We cannot allow anything without documents asked by the system," said a Customs official at Indo-Bhutan border gate. 

"The situation has resulted in large-scale illegal trade," said Sange Wangdi, a trader from Phuentsholling. "Prices, high in India due to shortage, have taken a nosedive in Bhutan, putting farmers and unorganized traders in a difficult situation," he added. 

According to Bhutan Government Market Research Bureau, India — the largest consumer of Bhutan’s cardamom — imported over 700 metric ton in 2016. That was worth around Rs 65 crore at wholesale level, which is about half of Bhutan’s national annual production. 

"This volume may reach twice as high with streamlined trade facility," said BAFRA officials. 

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