The Union Government has permitted 78 companies to import duty free 2,500 tonnes of black pepper under the Indo-Sri Lankan FTA.
A decision in this regard was taken at a meeting held in New Delhi on May 9 when these 100 per cent export oriented companies approached DGFT for permission to import a total quantity of 17,254 tonnes. However, the Commerce Ministry has allowed only the yearly quota of 2,500 tonnes as per the FTA norms with a specific direction that imports should be carried out as per the MIP notification at prices not less than ?500/kg.
These 78 companies which process and re-export will get 32 tonnes each. A single company has filed application to import 2,500 tonnes while three applicants for 1,000 tonnes each. In the applications, these companies have to show an agreement clause with a Sri Lankan exporter against which only the DGFT will issue license, Kishore Shamji of the Kochi based Kishore Spices said.
He said smuggling in large quantities as well as official imports of 300 tonnes at below MIP in April had hit prices. Any improvement can happen only if illegal routes are plugged.
However, spice exporters pointed out that MIP notification has not helped improve pepper prices in the domestic market with the rates moving southwards and hovering at ?360-380/kg depending on the grades. Gulshan John, past president of All India Spices Exporters Forum told Business Line that exporters are in discussions with the Commerce Ministry for easing the MIP notification norms at least for companies which are involved in re-exporting pepper after value addition. The government has sought data from the industry to prove its version, as the MIP notification has hit exporters in the country hard.
He alleged that MIP norms has created a black market for pepper imports and also boosted smuggling. It also facilitated setting up several value addition units in Vietnam and Indonesia and many Indian companies are looking for partners to start business through joint venture.