DGFT exempts Cashew EoUs & SEZ Units from minimum import price requirement

NEW DELHI - In a notification issued on few days ago, the Director-General of Foreign Trade (DGFT) stated that the MIP on cashew kernel brokens and whole nuts will not be applicable for imports by 100% export-oriented units and units in SEZs, provided that the imported cashew kernelsarenotsoldinthedomestictariffarea(DTA).

Imports of cashew kernels and broken nuts are prohibited. However, imports are free if the cost, insurance, and freight (CIF) value is greater than Rs 680 per kg for broken cashew kernels and greater than Rs 720 per kg for whole cashew kernels. The MIP conditions, however, will not apply to imports by 100% EoUs and units in the SEZ. According to the DGFT notification, SEZs and EoU units are not permitted to sell imported cashew kernelsinthedomestictariffarea(DTA).

According to P Sundaram, Chairman of the Cashew Export Promotion Council of India (CEPCI), the domestic market will be flooded with produce from competing countries, resulting in the closure of cashew processing units in the ountry. The domestic industry is already experiencing low demand, and the MIP notification will exacerbate the situation, according to Sundaram. Former CEPCI Chairman RK Bhoodes stated that the decision would be detrimental to the domestic cashew industry because it would pave the way for undervalued importsviaSEZs.

“With the current notification, the MIP is again made not applicable to SEZ, which in other words makes import of broken kernels through SEZ and its subsequent sales in the Indian market made easy. SEZ units can now import kernels at much lower prices than in India and export them at even lower prices after value addition under the Indian label. A genuine Indian exporter cannot compete with such SEZ exports,” he said. He emphasized that the industry worked hard to get MIP imposed on cashew kernel imports, which nearly stopped the unethical and undervalued import of kernels.