Intro: The deceitful import of cashew kernel is not just a loss to the national exchequer but also inflicts heavy damage to the domestic industry which employs over one million women.
The unchecked, ongoing fraudulent imports of finished cashew kernels are inflicting heavy loss to the national exchequer. According to available information about 4,000 tonnes of finished cashew kernels is imported through various ports in the country. Due to this the nation is losing to the tune of Rs 35 crore, thanks to the under invoicing. The import duty on cashew kernels is 36.9 per cent.
The Government of India vide notification No. 53(RE-2013)/2009-2014 dated 2nd December 2013 had fixed a minimum price of Rs 288/- per kg for broken grades and Rs 400/- per kg for unbroken grades of finished cashew kernels imported into the country. But as per statistics of the Directorate General of Commercial Intelligence and Statistics (DGCI&S), the under invoiced imports are still continuing even at prices as low as Rs 144.75 per kg. This is a clear violation of the notification.
Unfortunately despite repeated request from the Cashew Export Promotion Council of India (CECPCI), under the Ministry of Commerce to the Director General of Foreign Trade (DGFT) and Customs Department to take tough measures to curb the imports and penalise duty evaders, no action has been contemplated against culprits till now.
A similar request to investigate the fraudulent import of finished cashew kernels was recently submitted to the Union Commerce Minister Nirmala Sitharaman recently.
According to R K Bhoodes, chairman of the Federation of Indian Cashew Industry (Fici) the fraudulent import of finished cashew kernel is not just doing loss to the national exchequer but also inflicting heavy damage to the domestic industry which employs over one million women. “Huge quantity of finished cashew kernels, especially broken grades, is being imported from countries like Vietnam without paying any duty into the country under the guise of re-exports by some processors and traders. These broken grades seldom find any demand in the international market and are imported to be sold in the Indian market only. Against these imports, the regular exports of these processors and traders are adjusted in records as re-exports. By this way, huge amount of duty is evaded and the local industry is put to unhealthy competition and find difficult to survive,” he said.
Countries like Vietnam have cost advantage over India due to vast mechanisation, which otherwise cannot be practiced in India due to the vast employment of labour here. More than 11 lakh women are employed in this sector. Such fraudulent imports are a big threat to the cashew industry in India, Bhoodes apprehended.
Interestingly some processors and traders in the country are showing exports of finished cashew kernels to Vietnam, the largest exporter of cashew kernels in the world. These exports mostly get Switch Bill of Lading at Singapore and diverted to other countries.
Bhoodes said if the fraudulent imports are not curbed the cashew industry would soon die out and millions will be left jobless. “During the festival season in Kollam alone over Rs 4,000 core is distributed to the cashew workers as bonus. So, one can imagine the impact of such a situation on the local economy. People will be forced to starve.”