New export policy could harm spice exports.

Kochi: India's exports of spices could be impacted from the new export-import policy because exporters will lose significant amount of revenue after the new policy is implemented, officials of All India Spices Exporters Forum (AISEF) said.

In the new Foreign Trade Policy 2009-14, spices and its value-added products have been removed from the Vishesh Krishi and Gram Udyog Yojana (VKGUY) scheme and included in the list of focus products, Philip Kuruvilla, chairman AISEF said.

“The extent of incentives have been brought down to 2% from 5% because of which exporters have already suffered a financial loss of Rs 100 crore so far and by march next year would lose another Rs 200 crore,” he added.

Kuruvilla demanded that spices should be retained under the VKGUY and pepper and chillies which face stiff competition from Vietnam and China, should also be included under the yojana or in the list of focus group.

Pepper and chilli are the breadwinner of spice business and both of them face lot of challenges from other aggressive producers, he added.

Exporters have always discounted the 5% incentive available against VKGUY to sustain market position, but because of this sudden change in the policy, exporters who were availing these benefits have been badly affected for future commitments they made, Kuruvilla added.

The government, at least, should keep spices under VKGUY till March 31, so that exporters will avoid incurring huge financial losses, Kuruvilla said. India accounts for nearly 44% of global spices trade estimated 850,000 tonne in a year. The forum members would also be meeting Commerce secretary in New Delhi, he said.

Source : financialexpress.com