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Food importers question Govt of India’s policy of targeting food trade
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Wednesday, 18 July, 2018, 08 : 00 AM [IST]
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Ashwani Maindola, New Delhi
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Food importers in India fear trade losses amid the tariff war between the United States and India and have questioned the Government of India’s policy of targeting food trade. Three major commodities, viz almonds, apples and walnuts, could face serious challenges in the wake of the proposed import duty hike announced by the Indian government, which is slated to commence on August 4, 2018.
Amit Lohani, coordinator, Forum of Indian Food Importers (FIFI), stated that on an average, there will be a 40 per cent drop in the imports of these commodities, and that will impact food inflation to the tune of 20 per cent in case of almonds, 45 per cent in the case of apples and 140 per cent in the case of walnuts.
Currently India’s imports of almonds stand at 1,00,340 million tonne (MT) and are worth Rs 4,600 crore, those of apples stand at 93,000 MT and are worth Rs 672 crore and those of walnuts stand at 22,000 MT and are worth Rs 420 crore. The country imports agricultural produce worth Rs 10,500 crore and exports produce worth Rs 20,600 crore to the United States.
Lohani said, “If they are imposing tariff on steel and other such non-edible items, the government should consider retaliatory measures of similar kind. Why food?”
He added, “If India’s stand remains unchanged on August 4, this will surely lead to inflation, and the prices of almonds, apples and walnuts will see a steep hike. The retail prices of these items could be between Rs 1800 and Rs 2200 a kg. Now, for example, India imports one lakh MT of almonds and the domestic production is not sufficient to meet the demand. So inflation is bound to take place.”
The food importers’ various representatives have made representations before the ministries of commerce and finance, and even have written to the Prime Minister’s Office (PMO) in this regard. However, they still await a positive revert from the government.
It must be mentioned here that India retaliated to the US’ move of hiking import duty on certain Indian products by raising the import duty on products exported from US to India. The hike in tariffs include an additional duty of 20 per cent on almonds (fresh or dried); 25 per cent on fresh apples (which now stands at 50 per cent) and 100 per cent on walnuts.
The importers, meanwhile, stated that it would detrimental for the food trade in India. Lohani opined, “The depreciating rupee, the increasing oil prices and the anticipated increased tariffs are leading to continuous rise in food price inflation. Financial conditions are becoming tight primarily for imports, and it is need of the hour for the government to calibrate this to have a minimal impact on the stakeholders, which does not only include importers, but also the processing industry and other allied sectors.”
He added that this was the most turbulent time in the last 10 years, with market sentiments not supporting trade inflation at its peak and the dollar touching Rs 69. It appears that food processing industry was not the primary focus of the government, though it plays a conduit between farmers, who are suffering from a 35 percent spoilage and wastage, and the processing industry, which is suffering from high input costs, missing labour reforms and a receding consumer demand.
Lohani stated that serious negotiations were going on for over a month first in the US and then in India a fortnight ago, and now they are due in the US again, but the two sides had not yet agreed.
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