Govt allows setting up of pulses processing units in SEZ

Despite it being a banned export item, the government has allowed four firms to set up units to process pulses in SEZs provided they import the raw material. 

Special economic zones (SEZs) are export oriented entities and contributed about 35 per cent to the country's outward shipments in 2009-10.

"They can set up units if all the pulses (for processing) will be imported and no procurement will be made locally or from Domestic Tariff Area (DTA) till prohibition on exports continue," a Commerce Ministry official said. 

The inter-ministerial Board of Approval (BoA) headed by Commerce Secretary Rahul Khullar allowed Prakash Overseas to set up the unit in Indore SEZ, Kogta Import Export Private Ltd in multi product SEZ in Nasik district, Diet Foods International in a SEZ at Nagpur and Kitchen Express Overseas Ltd in KASEZ, Kandla.

In March, the government had allowed the SEZs to re-export commodities barred from outbound shipments, like non-basmati rice and pulses, after importing them in raw form and processing in these tax-free enclaves.

The government has prohibited exports of agriculture commodities like non-basmati rice and pulses, as prices of these essential items were skyrocketing in domestic markets. India imports about 4 million tonnes of pulses every year to meet domestic demand.

Pulses production is pegged at nearly 16 million tonnes in the 2010-11 season, compared to the anticipated domestic demand of 18-19 million tonnes. The shortfall in supply is being met through imports. Of the 580 SEZs approved, 114 are in operation.

SEZ exports grew by 56 per cent to Rs 1,39,841 crore during April-September 2010-11 over Rs 89,750 crore during the same period last year.