Government has amended the raw cashew nut import policy to exempt export-oriented units and processing units operating from Special Economic Zones (SEZ) from the minimum import price (MIP) requirement. In response, the industry stated that the policy change would be detrimental to domestic players because it would allow cheaper imports.
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 kernels are not sold in the domestic tariff area (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 kernels in the domestic tariff area (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 country. 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 imports via SEZs.
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