The Directorate General of Foreign Trade (DGFT) is ready to file a counter-affidavit in response to the interim stay by the Kerala High Court on the notification to fix the minimum import price (MIP) for pepper at ₹500 per kg.

“The DGFT seeks to establish that it is entitled to bring out such notifications and, therefore, the floor price on imports should be valid,” a government official told BusinessLine .

The court order, passed last month, followed writ petitions filed by exporting companies such as Kancor Ingredients and Synthite Industries, which stated that the DGFT 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. “The Kerala High Court has not questioned the MIP itself. What has been questioned is the DGFT’s power to issue this kind of a notification based on the arguments given by exporting companies. The DGFT has to counter that,” the official said.

When the stay order was given, the DGFT did not get the opportunity to furnish its views. Now, it will have to make its side of the story heard, the official added.

“Under the FTDR Act, for any kind of Foreign Trade Policy, the DGFT is entitled to take action. The DGFT will now have to give inputs to the government counsel on how they have the power to bring out notifications fixing MIP,” the official said.

The MIP of ₹500 per kg on the import of pepper was controversial right from the time it was imposed in December 2017; petitions were filed by domestic pepper growers who were hit by the falling prices of the spice in the domestic market. However, some importers continued to import pepper by paying a small fine (as pepper was defined as ‘free’ in the December notification), which prompted the DGFT to impose a ban on the import of the condiment if below ₹500 per kg.

 

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