Date:28/03/2006 URL: http://www.thehindubusinessline.com/2006/03/28/stories/2006032803391900.htm

Back 4% duty likely on Lankan pepper

G.K. Nair

Import curbs

RELIEF ON CARDS: Will domestic pepper gain now?

Kochi , March 27

In a bid to control the imports of black pepper from Sri Lanka, the Centre is likely to impose a four per cent countervailing duty.

The Government is expected to invoke the provisions made in the Union Budget 2006-07 and that could be made applicable to pepper imports from Sri Lanka, official sources told Business Line.

Sri Lanka could export 50 per cent of its pepper production under the Indo-Sri Lanka pact signed in 2003. Its production at that time was 8,000 tonnes, of which its consumption was 4,000 tonnes, leaving an exportable surplus.

But, after signing the Free Trade Agreement the country's production increased to an estimated 18,000 tonnes, trade sources said.

Besides, there are widespread allegations that pepper of other origins such as Vietnam is being channelled into India through Sri Lankan exporters just by making trans-shipments of the containers at Colombo and obtaining required certificate of origin.

Largest importer

According to a latest International Pepper Community report, India remained "the largest importer of pepper from Sri Lanka with a share of 90.4 per cent of the total exports in 2004 due to the 100 per cent tariff concession granted under the Indo-Sri Lanka Free Trade Agreement applied since March 2003."

On the other hand, imports from Sri Lanka do not attract any state levies like Sales Tax/VAT while indigenously produced pepper attracts such levies.