‘Under-invoiced’ cashew imports hit domestic industry

Import of cashew kernels, allegedly by under-invoicing, is becoming rampant and, this in turn, has affected the domestic industry.

“It has come to our notice that rampant under-invoiced imports of cashew kernel (especially the brokens and pieces) into the country are taking place, whereby, large quantities are finding their way into the domestic markets”, Sasi Varma, Executive Director and Secretary, Cashew Export Promotion Council of India (CEPCI), said.

This leads to considerable revenue loss by way of import duty for the Government besides adversely affecting the domestic cashew processors, he said.

Such under-invoiced imports, which are understood to be taking place mainly through Nhava-Sheva, Mumbai and Chennai ports are not only ruining the cashew processors, but helping competitors in the international market.

“It is a serious issue”, K.A. Retheesh, Managing Director, state owned Cashew Development Corporation(KSCDC), which provides employment to over 20,000 people, mostly women, told Business Line .

He said pieces and brokens are used in large quantities by sweets manufacturers and confectioners, especially in North India, which is a major market for these grades.

He said the Corporation has been marketing pieces and broken after adding value to them in the upcountry markets, especially Delhi.

Cashew industry, including those in the unorganised sector, process about two million tonnes of raw cashew nuts and produces around five lakh tonnes of cashew kernels. India exports around two lakh tonnes of kernels while the balance is absorbed by the domestic market, Retheesh pointed out.

“The importers sell it to the traders who distribute it to the kirana markets in metro cities. It is difficult to exactly pin point the price as the traders sell it off without specifying the origin. Each time when this happens, there is an aproximate 15 per cent fall in markets prices,” Sasi Varma said.

Basic import duty

The basic import duty on cashew kernels is 30 per cent but with cess plus special additional duty, etc. it will work out to 36.9 per cent.

Even though it is difficult to estimate the domestic demand in the absence of enough data, the internal cashew market, given the total volume of raw nuts processed by the industry, both organised and unorganised, is estimated to worth Rs 4,000-5,000 crore a year at present, he said.

Though the Director General of Foreign Trade, Ministry of Commerce, sends out periodical alerts to all customs, figures show that this procedure is continuing.

The declared prices for imports, Varma said, are much lower than the actual value, which is Rs 200-500 a kg depending on the quality and grades.

In addition to this, it is learnt that considerable quantities of mis-declared cashew kernels are being imported into India under the guise of cattle feed / poultry feed, etc. causing further loss to the Exchequer.

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