Pepper growers have urge the government to relook at the lower import duty structure India has under trade pacts SAFTA and ISLFTA so as to protect domestic players.
There is a concessional duty of 8 percent for the spice under the SAFTA (South Asia Free Trade Agreement), while import of 2,500 tonnes of Pepper is allowed at zero duty under the ISLFTA (Sri Lanka Free Trade Agreement).
On the other hand, import duty on Pepper is kept higher at 52 percent for ASEAN region and 70 per cent for Brazil and other countries.
There are apprehensions that since most of the Pepper-producing countries are in the ASEAN region, Pepper from the region is being routed through Sri Lanka taking advantage of lower duty under SAFTA and ISLFTA.
Domestic Pepper prices have fallen below the cost of production of Rs 341 per kg at present. While the fixing of minimum import price (MIP) at Rs 500 per kg has helped contain imports to some extent, the local prices still remain lower.