The free-trade agreement with ASEAN (Association of South East Asian Nations) should not enable cheap import of low grade coffee into India as this will impact the domestic brand of coffee in the international market.
As per the FTA with ASEAN, the present import duty of 95 per cent on coffee will be reduced to around 40-45 per cent by 2019-20.
According to planters, the reduction of import duty is expected to boost imports due to the less variations between domestic and imported coffee in future. “Cheap imports of low grade coffee should not be allowed, which has the potential to hurt the brand image of domestic coffee in the international market,” Sahadev Balakrishna, president of Karnataka Planters’ Association said. Presently, India imports around 30,000 tonnes to 40,000 tonnes of coffee per annum and most of the imported coffee is re-exported after processing under the brand name of Indian coffee.
“Also, there should be less use of cheap coffee in the domestic market as any dumping may lead to a price crash of domestic coffee produce,” Balakrishna added.
India, which signed a free trade agreement with ASEAN in 2009, has put agri-commodities like coffee, tea, palm oil and pepper under highly sensitive list and import duty on these commodities will be incrementally reduced to 40-45 per cent by the end of this decade.
“FTA with ASEAN and World Trade Organisation (WTO) specifies for free and fair trade in the world. However, phytosanitary and quarantine measures should be strictly adhered to before the import of any coffee under these regulations in future,” Ramesh Rajah, president of Coffee Exporters Association said.
He also said unwanted diseases should not be imported in the guise of free trade and Indian authorities have to be vigilant against such pest and diseases. It is to be noted that coffee berry borer has been introduced in India earlier through some seed material which poses a significant threat to coffee produce in the country.
He, however, stressed on the reduction of import duty further for better price discovery and said planters were adequately protected under the present regulations. “Presently, soluble coffee manufacturers are importing coffee on zero duty without influencing price in the domestic market,” he added.
Referring to this issue, Jabir Asghar, vice-chairman of Coffee Board said reduction the import duty shouldn’t flood the domestic market with imported coffee. “Balance should be maintained in imports to protect the domestic coffee industry, failing which India will be a low-cost destination for cheap coffee,” he added.
