7-Nov-2020: Dumping by Vietnam hits Indian pepper

The dumping of Vietnamese pepper in India is happening via Nepal and Sri Lanka. In the case of dumping a country or company exports a product at a price that is lower in the foreign importing market than the price in the exporter’s domestic market. Dumping leads to price-suppression in destination countries and could lead to long term ill effects on the domestic producers.

Vietnam pepper exporters are making use of bilateral trade concessions between India and Sri Lanka and Nepal to dump the pepper into the Indian market. Sri Lanka and Nepal have lower custom duties on their pepper exports to India. Under the FTA, Sri Lanka can export up to 2,500 tonnes per year at zero duty to India, while the duty is 8% under the SAARC Agreement and 50% under the ASEAN Pact.

Indian pepper has suffered a sharp erosion in domestic prices due to the glut in supply.

The Centre must take quick measures to curb misuse of imports. The recently introduced Customs Administration of Rules of Origin under Trade Agreements Rules, 2020 (CAROTAR, 2020), will help rein in misuse of import provisions.

Also the governments must prohibit EOUs and units in SEZs from selling black pepper in the domestic market as these units enjoy special import provisions.