The government today said it has increased the minimum import price on arecanuts by Rs 52 to Rs 162 per kg to discourage inbound shipments of the commodity.
"On account of unabetting import of arecanut from neighbouring countries...Such as Indonesia and Myanmar taking the advantage of low import duty provided under SAFTA and consequent representations from various stakeholders, the Department of Commerce has decided to increase the MIP on import of arecanuts from existing Rs 110 per kg to Rs 162 per kg with immediate effect," an official statement said.
South Asia Free Trade Agreement (SAFTA) was implemented in 2006 between India, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka.
The minimum import price (MIP) is the rate below which no imports are allowed. The Food Safety and Standards Authority of India (FSSAI) has also advised its field offices to stringently adhere to the quality specifications of arecanut before clearing the import consignments, it said.
"This has been done with a view to prevent inferior quality arecanut from entering Indian market and destabilise the domestic prices," it added.
The customs authorities have been advised to check the rules of origin with "utmost care" so as to ensure that arecanut grown in other countries are not imported through our neighbouring countries taking advantage of low import duty under SAFTA," it added.
The increase in the existing MIP on import of arecanuts will be in the interest of the domestic farmers, the statement said.
Karnataka is the largest producer of arecanut, followed by Kerala and Assam.
As per estimates, the production has been stagnant at around 6.2-6.3 lakh tonnes per year.
According to a report, the value of arecanut imported into India increased by 120 per cent in 2012-13. The country imported Rs 612.78 crore worth arecanut in 2012-13 as against arecanut worth Rs 278.13 crore in 2011-12.
A major share of this was imported from Bangladesh.