Cashew industry disappointed with Budget proposals

KOCHI: Cashew sector feels that the advantage of duty reduction on import of raw cashews is neutralised by the reduction in the number of months for re-export to three months from six.

The cashew sector had been arguing for lifting the 5 % duty on import of raw cashews for processing and export because of the runaway increase in prices. The government has cut duty by 50% in the Union Budget. But on the other hand they have reduced the time for re-export of cashews under advance licence to 3 months from 6 months.

"Actually it is self-defeating as majority of exporters rely on advance licence for importing raw cashews at zero duty and exporting kernels. It is practically impossible to export in three months ,'' said G Satheesh Nair, managing partner of India Food Exports.

But when they pay 2.5 % and import, there is no restriction on the period for export. "In other words , we have to pay duty at a lower rate for raw cashew import for export as it will be difficult to use advance licence now because of reduction in the period for export,'' Nair said

As the raw nut prices are on an all-time high of $2400 tonne, the exporters had demanded scrapping the duty. "This provides some relief but even paying lower duty the export will be unviable given the high price of raw nuts,'' said Anu S Pillai, partner of Anu Cashews.