Dgft Slaps Notice On Pepsico Over Export Obligations

The director general of foreign trade (DGFT) office has issued a notice to soft drinks giant PepsiCo for failure of the company to meet its export obligations.

Sources in the ministry said that the company had undertaken large obligations under the advance licensing scheme but had failed to meet its commitments. A notice seeking an explanation has thus been sent recently to the company.

Ministry sources added that in fact the company had defaulted heavily in the first three years of operations though they refused to give details.

Procedures for recovery and penalties would be worked out after the company responds to the notice.

 

A rigorous system of monitoring export obligation fulfilled both under the advance licensing schemes and the EPCG has been put in place by the DGFT. In fact under the Export Promotion Capital Goods (EPCG) scheme it is proposed to computerise the monitoring by 31.3.1998.

Ministry sources explained that PepsiCo has undertaken export obligations even as part of its FIPB clearances which has not been met.

DGFT N L Lakhanpal confirmed this and said the company (Pepsico) had defaulted on a major amount. The company management has been asked to appear personally and present their case, he said

An advance licence is granted to a merchant exporter or manufacturer exporter for the import of inputs required for manufacture of goods without payment of basic customs duty.

The licences are subject to a fulfillment of a time bound export obligation and value addition as specified at the time of issue. In case a company defaults, further licences will not be issued to the company and a penalty can also be imposed.

Sources added that the ministry was cancelling and suspending import export codes of companies that have exported goods of bad quality.

In many cases, licences have been suspended for periods of 6 months. In some cases, the licences have been cancelled altogether..

The commerce ministry is also taking other forms of severe action against exporters of sub standard goods. It has decided that it shall impose deterrent penalty on exporters who were tarnishing the countrys image by doing so.

Of the cases where adjudication proceedings have been completed the Importer-Exporter code numbers of the offending firm have been cancelled, disentitling them from undertaking any export or import activity.