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Pepper exporters, mainly value-added processors, heaved a sigh of relief when they obtained an interim stay from the Kerala High Court on the DGFT notification fixing a minimum import price on pepper at ₹500/kg.
Passing the order, the Court observed that only the Central Government has the power to issue notification, framing or amending the Exim policy under the Foreign Trade (Development & Regulation) Act 1992.
The court order comes in the wake of a batch of writ petitions filed by Kancor Ingredients, Synthite Industries, etc challenging that the Directorate-General of Foreign Trade has no jurisdiction to amend the policy condition by way of a notification under section 3 of the Act, as the same provides only for issuance of orders restricting imports and exports.
According to the petitioners, the MIP notification destroyed pepper imports to the country and consequently, the export of value-added products of pepper has seen a significant decline for the year 2017-18.
There has also been a sharp decline in the export of value-added products due to the imposition of MIP without which no person could import pepper.
The petitioners said that total pepper production in the country is within the range of 35-60,000 tonnes, while the domestic consumption itself is more than 50-70,000 tonnes per year. The requirement of pepper for export purpose or for other value-added products is in the range of 20,000 tonnes.
Even when the pepper production in the country has been at its maximum, it was not sufficient to meet the export requirement for the spice industry. Further the pepper available in other countries are also suited for value added products due to which imports from Sri Lanka, Vietnam, Indonesia have boosted the export of value added products such as ground spices, oleoresins, etc.
The cheap labour and surplus production in other countries has forced petitioners to depend on imports to compete in the world market.
Unless competitive pricing is provided, the domestic spice industry will be hit, they said.
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