Under-invoiced imports of cashew kernels (broken and split pieces) from Vietnam and Brazil are affecting the domestic cashew processing industry. As traders under-invoice the goods to evade the import duty, it also results in revenue loss for the government.
Between April 2011 and February 2012, about 2,000 tonnes of cashew kernels have been imported from Vietnam and Brazil by under-invoicing, according to the Cashew Export Promotion Council of India (CEPCI). About 818 tonnes of cashew kernels, valued at Rs 10.25 crore, were imported through Nhava Sheva port at an average price of Rs 125.32 per kg. The declared prices for imports are much lower than the actual value, which is in the region of Rs 200-500 per kg depending on the quality and grades, a CEPCI official said.
“We have noticed rampant import of under-invoiced cashew kernels, especially broken and split pieces during the last financial year. This is affecting the domestic processors, who are unable to compete with the imported stuff,” Sasi Varma, executive director and secretary, CEPCI, said.
| TASTY BITES Import of cashew kernels* | |||
| Year | Quantity (tonnes) | Value (Rs crore) | Avg unit value (Rs/ kg) |
| 2010-11 | 5,400 | 35.28 | 65.33 |
| 2011-12** | 2029 | 41.56 | 204.80 |
| *India imports cashew kernels from Vietnam, Brazil and Kenya ** Till February | |||
The import duty on cashew kernels is 36.9 per cent. Mumbai and Chennai are two other ports, where the under-invoiced imports are taking place.
CEPCI, a body under the ministry of commerce for the promotion of cashew exports, has urged the director general of foreign trade (DGFT) and the customs department to take tough measures to curb the imports and penalise duty evaders.
“We have written to the government, DGFT and the customs department to be more vigilant and restrict the imports to one or two ports, so that the under invoicing of cashew kernels can be stopped. We have asked them to designate Tuticorin and Kochi ports for import of cashew kernels because the customs officers in many other ports are unable to identify cashew kernels,” Varma said.
With the Diwali festival round the corner, it is estimated the import of broken kernels will further rise, Varma added.
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“There is no domestic consumption of cashew kernels in Vietnam, which is mainly exporting its kernels to the US. As the US is not taking splits and broken kernels, Vietnam is exporting these to India, which has a huge market for such products. It is, in turn, affecting the domestic cashew processing industry,” Varma told Business Standard.
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Through DGFT, the commerce ministry sends out periodical alerts to all customs. Figures show that this procedure is continuing, he said. In addition to this, it is learnt that considerable quantities of mis-declared cashew kernels are being imported into the country under the guise of cattle feed / poultry feed, among others, causing further loss to the exchequer, Varma noted.
“These are not only ruining our domestic cashew processing industry, but also helping our competitors in the international markets as there is no demand for their broken grades. Our competitors like Vietnam and Brazil are encroaching into our domestic market forcefully. This will ultimately affect our employment of lakhs of women workers currently employed by the cashew processing industry in rural areas,” he said.
India produces about 650,000 tonnes of raw cashew nuts and imports 700,000 tonnes, which will be converted into cashew kernels. In 2011-12, India exported 130,000 tonnes of kernels valued at Rs 4,400 crore. The domestic consumption is estimated at 150,000 tonnes valued at over Rs 5,000 crore.