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  • Lankan veil for African cashew

    Aug 18th, 2016

    Cashew suppliers based in African countries are now using Sri Lanka as a transit camp for India-bound raw nut to evade import duty imposed from March 1 this year.The Centre imposes a duty of 9.36 per cent on raw cashew nut imported from countries that are not covered by the South Asian Free Trade Area (SAFTA) under the South Asian Association for Regional Cooperation (SAARC).

    After briefly keeping the consignment in Sri Lanka, the commodity is brought to India free of import duty under the SAFTA agreement. Though Sri Lanka is not a raw cashew exporting country, hundreds of tons of raw nut consignments are arriving in India backed by a Sri Lankan certificate on origin. The raw nuts arriving in this manner are from Guinea Bissau and Ivory Coast.

    Survival matters

    While this is causing huge loss to the exchequer, processors here say it is the only alternative to survive since the new duty has rendered processing unviable and the finished product uncompetitive.

    Under rules effective from March 1, raw nuts can be imported under three norms. One is the duty neutralisation scheme under which 25 per cent of the kernels in weight to imported raw nuts have to be mandatorily exported. The processors say the majority of consignments do not give 25 per cent out-turn, usually it ranges from 20 to 22 per cent. “So that norm is a difficult proposition,” they say.

    The second is the 9.36 per cent import duty without any commitment to exports and the third one 4.36 per cent duty on import of raw nut under the least developed countries scheme.Imports from African countries such as Ghana, Benin, Togo, and Tanzania are eligible for this concession. But production in these countries is too little for the industry and lags behind in quality when compared with other African countries.