The Union Commerce Ministry – having been convinced of a loophole in its notification dated December 6 when it decided to impose a minimum import price (MIP) for pepper, which is being blatantly exploited by importers – has decided to take it up with the Union Finance Ministry for initiating necessary measures in the interest of the country’s pepper growers.
Despite the imposition of an MIP of ₹500 per kg, imports were taking place unhindered, and upon inquiry with the Customs authorities, “it has come to our knowledge that imports are being allowed below MIP as pepper is defined as ‘free’ item under the definition policy, and hence these importers are being allowed to clear the goods under adjudication proceedings by collecting a small fine on the invoiced value. The Commerce Ministry, having realised this fact, has decided to take it up with the Finance Ministry”, Kishor Shamji Kuruwa, Convener, Kerala Chapter of Consortium of Pepper Growers Organisation, told BusinessLine .
“The Finance Ministry has to change pepper from the present classification of ‘free’ item to ‘prohibited item’, and only then the Customs would be able to enforce the rule strictly,” he said.
According to K K Vishwanath, the consortium’s co-ordinator, “as of now, imported pepper is adjudicated, and the stipulated officer will review the file and allow the import by levying a meagre fine of 10 per cent on the invoiced value much below the MIP andin the range of about ₹250 and ₹350 a kg. Exploiting this loophole, black pepper is still imported from different destinations unabated”.
Facts presented
Meanwhile, on advice from the Commerce Ministry to approach the Director General, Safeguards (DGS), “to investigate if there is existence of “serious injury” or “threat of serious injury to domestic industry”, the consortium has presented the facts before the DGS”, Heman Kishor, an office-bearer with the consortium, said.
The consortium has appealed to the Director General, Safeguards (DGS), to initiate adequate safeguard measures against rising imports as per provision available in Article 16 of the SAFTA agreement so that Indian farmers and pepper industry could be saved.
To substantiate its claim, quoting Sri Lankan Customs data for January-October 2017, he said almost 14,000 tonnes were exported to India under various HSN codes. With another 2,000 tonnes in November and December, the total official exports from Sri Lanka to India work out to 16,000 tonnes. Whereas during January-December, 2016 Sri Lankan pepper exports to India were only 4,642 tonnes. Thus, there is a significant upsurge in exports from Sri Lanka over 2016.
“Also, we have come to understand from the Sri Lankan exporters that a web of shell companies is being used to re-route Vietnamese Pepper as Sri Lankan,” said Heman.
The actual entities involved in such activities, he said, “were traced back by us by following Vietnam Pepper Association (Official Vietnam Export Figures) for shipments to Sri Lanka. They were re-routing containers without making entries in the computer system of Sri Lankan Customs, and were able to procure certificate of origin for material, which has not been inspected in Sri Lanka”.