Expressing concerns over unfair arecanut import practices by some people, the Central Arecanut and Cocoa Marketing and Processing Cooperative (Campco) Ltd has urged the Government to implement stronger regulations to protect the interests of domestic growers.
In a letter to the Union Commerce Minister, Piyush Goyal, the Campco President, A Kishore Kumar Kodgi, said roasted arecanut is being imported under HSN Code 20081920 as a value-added product, bypassing customs duty and entering the market under misclassified categories.
(HSN Code beginning with 2008 pertains to ‘Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included’. It mentions HSN Code 20081920 as ‘Other roasted nuts and seeds’. HSN Code 080280 specifically pertains to ‘Arecanuts’.)
He said this practice is often leveraged to bypass the appropriate tariff structure, thereby impacting domestic arecanut growers adversely. Such imports subject only to 12 per cent GST through Advance Ruling Licenses.
Compromising quality
These stocks are being mixed with local varieties, compromising quality and leading to rejection by buyers. This directly affects farmers, impacting arecanut prices and threatening farmers’ earnings, he said.
It is to be noted here that a DGFT (Directorate General of Foreign Trade) notification dated February 14, 2023, increased the minimum import price (MIP) for arecanut from ₹251 a kg to ₹351 a kg. Following this, the importer has to pay a minimum rate of ₹351 a kg plus the Customs Duty of 108 per cent.
Kodgi said arecanut is also being imported with the addition of menthol, which provides a different aroma but does not alter the fundamental quality of the product as arecanut. Such practices are detrimental to the interests of domestic farmers and distort the market.
Seeking a level-playing field in this regard, Kodgi suggested that all imports of arecanut, including roasted and value-added forms under various HSN codes, be subjected to a minimum import price that reflects fair market prices. This will deter attempts to exploit tariff discrepancies, he said.
Need for monitoring mechanism
Stressing the need to strengthen the monitoring mechanism to prevent the misclassification of imported arecanut under HSN codes intended for other products, he said such practices dilute the effectiveness of protective tariffs.
He also requested the Government to introduce policy measures to ensure that imported arecanut does not undercut domestic production, thereby preserving the livelihoods of farming community.
Stating that India is one of the largest producers of arecanut, he said lakhs of farmers and their families depend on this crop for their livelihood. The unchecked import of roasted arecanut and other value-added forms at lower tariff values not only distorts the domestic market but also undermines the hard work of farmers, he said.
Meanwhile, Campco President also appealed to the domestic stakeholders to avoid purchasing and mixing imported arecanut to safeguard the quality and the agricultural community’s collective interests. Campco remains committed to the welfare of farmers, and united action is essential to prevent further disruptions and secure the livelihoods of areca growers, he added.