Resentment is brewing among spices exporters over the recent amendments in the import policy that puts black pepper on the restricted list of items and prohibiting its import below the MIP.

Expressing disappointment over the notification, the All India Spice Exporters Forum said the move would affect export of value-added black pepper products from India.

Exporters will now have no option but to shift their base outside India, which will affect the prices of other spice items and pave the way to source from the cheapest landed cost. “This is happening at a time when the Prime Minister is aggressively promoting Make in India”, Prakash Namboodiri, Chairman of AISEF, said citing the $2.5-billion forex revenue earned by the industry from value-added spices exports last year.

The global pepper market is now way below ₹200/kg and the industry was barely able to meet its obligation by importing and paying fine as it has to be re-exported against ALA/EOU/SEZ. With the latest notification, the customer contracts cannot be further fulfilled as the raw material prices globally are at ₹175/kg and to import at ₹500/kg and then re-export is totally un-viable.

Gulshan John, past President of India Pepper and Spice Trade Association, said that there are about 20 exporting units operational in the country and with the recent amendments in the pepper import policy, they are now exploring options to set up units in countries like Vietnam, Sri Lanka, Indonesia, etc.

He said the quantum of pepper exports stood at 20,000 tonnes valued at ₹1,000 crore on the basis of an average price of $5,500/tonne in 2017. Of this, exports of value-added pepper was Rs ₹950 crore (95 per cent value-added products is in the form of oleoresin oils, cracked and ground pepper steam, sterilised).

The emerging situation will have a cascading impact on other spice exports from India. Pepper is always exported in combination of other spices and rarely in isolation, he said.

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