Sunday, December 1, 2013

Hike in EU customs duty to hit Indian exports

New Delhi will ask Brussels to reconsider the decision by the European Commission (EC) to end a preferential tariff system for imports from India and other developing nations. Should the current regime of low customs duties end, it would make Indian goods more expensive with exporters paying anywhere between 6% and 12%. “We have a month’s time before the new GSP (generalised system of preferences) regime to convince the EU,” an official familiar with the development told FE.

The EU has decided to “graduate” exports of several items including textiles, chemicals, minerals, leather goods and motor vehicles from India out of its GSP scheme with effect from January. Preferential or nil customs duty to exports from developing nations under GSP is an exception to the World Trade Organisation obligation of member states to give every other member equal and non-discriminatory treatment under the ‘Most Favoured Nation’ status. Other products to be excluded from the preferential import tariff include bicycles, aircraft, spacecraft, ships and boats. India’s exports to the European Union, which accounted for 17% of the country’s total exports, shrank by over 4% in 2012-13 to $50 billion.

According to official sources, India’s commerce ministry will also protest the EU’s move to simultaneously grant zero customs duty on textile imports from Pakistan from January. This, according to New Delhi, will affect the regional competitiveness of India’s textile industry, its second largest employment creator after agriculture.

“We will take it up with Brussels because for textiles, it is a double whammy. The EU has removed Indian textiles exports from GSP, which means higher duty at EU borders, and they are in the process of giving textile exports from Pakistan GSP Plus status, which means zero duty,” an official confirmed to a news agency.

The move gives clothing, apparel and accessories exports from Pakistan a 10% duty advantage over those from India. The official explained that the EU Parliamentary Committee’s vote on November 5 to give GSP Plus status to textiles from Pakistan will have to be ratified by the European Parliament, which it is expected to do in early December. The EC’s decision to graduate the Indian textile industry out of GSP from January 1 already has the approval of the European Parliament.

The EU’s move to deny India the GSP benefit for certain goods is part of its plan to redesign the scheme. The idea is to exclude advanced developing economies that have integrated into the world trade and to focus on the needs of those that are lagging. Textile exports from India are being phased out of GSP as they exceed 14.5% in value of textile imports into the EU from all beneficiary countries, going by a three-year average up to 2012. For other products the threshold for exclusion is 14.5% as per the EU regulation.
The European parliamentary committee’s vote to grant for GSP Plus status to textile imports from Pakistan and nine other countries is aimed at promoting international conventions on core human and labour rights, environment and good governance. According to overseas reports, a GSP Plus tag for Pakistan would help it create a million new jobs, boost its exports to EU by $500 million and facilitate capital flow to the sector because of the competitive edge from tariff removal.

Ajay Sahai, director general and CEO, Federation of Indian Export Organisations, said the EC’s decision would affect the competitiveness of the country’s exports. “Even though the EC has suspended this preference for both India and China, we would be hit more since China is more competitive," Sahai said.

Indian officials are also worried about the prospect of a decline in forex inflows in a year in which they had to take harsh steps like curbing gold imports to contain the current account deficit to below $70 billion or 3.8% of GDP. "It is important for affected industries to prepare themselves for the change. The cost of specified Indian exports to the EU shall, as a result of the proposed changes, increase and accordingly will impact their competitiveness," said Saloni Roy, senior director, Deloitte in India.

"The US has already given many advantages to Pakistan due to various political reasons and with this suspension from the EU, we might see a shortfall of 2-5% in exports," said Vishwanath, joint managing director of Nath Brothers Exim International, a Noida-based firm exporting garments.

To get broader preferential access to the EU market, India is now negotiating a free trade pact with the EU, which already has such arrangements with about 34 other countries. Talks on the proposed India-EU pact are progressing slowly due to a lack of agreement on areas of market access and its extent.

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Major east coast ports witness dip in exports

VISAKHAPATNAM: In what should be a major wake up call for the government, four of the six major ports on the East Coast have witnessed a drop in export cargo over the last two financial years. Visakhapatnam Port, which exported 14.2 million tonnes of cargo in 2010-11, exported only 11.2 million tonnes in 2012-13, a drop of three million tonnes, according to data issued by the Union shipping ministry.

Chennai Port, which had topped the exports chart two years ago among the six major East Coast ports, witnessed a fall of little more than two million tonnes, while the drop in exports at Paradip Port was close to a staggering 13 million tonnes in the same period. Kolkata Port, which comprises the Kolkata Dock System and Haldia Dock Complex, also witnessed an overall drop in exports.

The VO Chidambaram Port, which was earlier known as the Tuticorin Port, saw export cargo rise by nearly 1.4 million tonnes between 2010-11 and 2011-12 but this subsequently dropped by almost 0.4 million tonnes in 2012-13.The main reason for the decline in exports from the major ports is the restrictions on iron ore mining, which has added to the burden caused by the global economic slowdown. "The economic recession is the main cause of decline in exports at the major ports. This is likely to continue this year also," said Confederation of Indian Industry, Vizag zone, chairman G Sambasiva Rao."Restrictions in iron ore mining and the economic slowdown are largely causing a decline in exports. At the same time, private ports near the major ports are snatching away the bulk of the export cargo.

To counter this, the central government should remove the Tariff Authority of Major Ports (TAMP) to provide a level playing field for major and minor ports," Water Transport Workers' Federation of India general secretary T Narendra Rao told TOI."The major ports had a traffic share of about 64% in 2010-11. This has now decreased to almost 58%. On the other hand, the share of non-major ports has gone up from 35.58% in 2010-11 to 41.54% in 2012-13," said Rao, citing a report by the Indian Ports Association (IPA) published in September 2013.

Rao also alleged that the "government is not serious about protecting major ports which do not have modern equipment and face delays in dredging projects". Visakhapatnam Port has Gangavaram Port and Kakinada Port in its neighbourhood, Chennai Port has Katupalli Port and MARG Karaikal Port, port sources pointed out. Paradip faces competition from Dhamra and Gopalpur, whereas Kolkata needs continuous dredging operations. "Iron ore used to account for a chunk of exports but this has now almost stopped because the government has slapped a 30% export duty and mining has been banned.

Besides, dredging is a major problem that should have been addressed several years ago, especially in Vizag. As a result of the continuous delays, customers prefer going to private ports that have berths ready to discharge the cargo instead of facing problems at a major port," an industry source pointed out.

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Thursday, November 28, 2013

Guar exports from India seen surging as price slump spurs demand

New Delhi : A record plunge in the prices of guar gum, a thickening agent used for oil and gas extraction, may boost exports from India as demand revives among US drilling companies and European food processors.

Shipments may surge as much as 50% to 500,000 metric tons in the year that began on 1 April from 333,000 tons a year earlier, said Rajesh Kedia, director at Jai Bharat Gum & Chemicals Ltd., India’s third-largest exporter.

Shipments increased about 30% to about 210,000 tons in the five months through August, he said.Prices slumped after India, the world’s largest producer, banned futures trading in March 2012 to curb speculation and record rates cut demand from users. Rising supplies may further pressure prices, lowering costs for users Halliburton Co. and Baker Hughes Inc. Guar prices may continue to fall, Mark McCollum, Halliburton’s chief financial officer said 19 September.

The importers will definitely buy more as prices are attractive, Chowda Reddy, a senior manager at Inditrade Derivatives and Commodities Ltd., said in a phone interview from Hyderabad. Demand will increase.Guar gum futures slumped more than 50% since 15 May, when the Indian exchanges restarted trading after a 14-month ban.
The regulator suspended trading in March 2012 after prices rallied more than nine fold in one year to Rs.95,920 ($1,527) per 100 kilograms (220 pounds) on the National Commodity & Derivatives Exchange Ltd. in Mumbai.

Production is seen exceeding demand for a second year, Kedia said in a phone interview from Bhiwani in Rajasthan. Processors need 1.8 million tons of guar seeds to meet export demand of 500,000 tons of guar gum, he said. Seed production in Rajasthan, Gujarat and Haryana states, which together account for more than 99% of India’s harvest, is estimated to drop to 12% to 2.15 million tons in the year started July 1 from a year earlier, government data showed.

The erratic rains and long dry spell in western parts of Rajasthan were responsible for the lower production, said J.S. Sandhu, a joint director in the state’s agriculture department. Inventories of about 800,000 tons of guar seeds will make up more any shortfall in output, Kedia said. India accounts for more than 70% of the global output of guar, which means cow food in Hindi, according to the Multi Commodity Exchange of India Ltd. The seed is also grown in Pakistan and the US
Fracking Guar gum is used in the pressure-pumping technique known as fracking, which blasts water mixed with sand and chemicals underground to free trapped hydrocarbons from shale formations.

It is made into a thickening gel used to carry sand down a well and into the cracks created from fracturing. It is also used as an ingredient in food emulsifiers, additives and thickeners. Guar gum for delivery in December fell 0.6% to 14,620 rupees per 100 kilograms in Mumbai on Thursday. Some of the drilling companies, which began using alternative products to guar gum after the price surge last year, may return to the commodity as availability is assured at lower prices, Kedia said.
If prices continue to fall, there may be a negative impact on guar crop next year, Kedia said. Farmers are disappointed that guar prices have declined below their expectation.

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Thursday, November 14, 2013

New system may cut export customs clearance to few hours: Chidambaram

Finance Minister P Chidambaram today expressed hope that the time taken for customs clearance of export cargo will come down to a few hours after implementing a risk management system.

"I sincerely hope that with the introduction of RMS in exports, the dwell time which now ranges from 1.6 days to 3.68 days will be brought down to a few hours," Chidambaram said after launching the all-India Risk Management System (RMS) for exports.
India started using the RMS for imports in December 2005 and it has helped to bring in additional revenue of Rs 2,211 crore, Chidambaram added. It has also reduced the dwell time, or the duration for which cargo remains in transit storage while awaiting clearance, for incoming shipments.

"The revenue department claims that the dwell time for imports has come down drastically after launch of RMS in imports. Likewise, RMS in exports is intended to bring down the dwell time so that the cargo meant for exports moves up quickly, leaves the shores of India towards its ultimate destination," Chidambaram said.

The time currently taken for customs clearance of export cargo in Mumbai is 1.6 days, while at the Inland Container Depot in Delhi it is 3.68 days.

Chidambaram said the RMS is based on trust and is part of international co-operation efforts on trade-related issues. The facility will enable low-risk consignments to be cleared based on self-assessment declarations by exporters.

By expediting the clearance of compliant export cargo, the system will contribute to lower dwell time, besides reducing transaction costs and making businesses internationally competitive.

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Tuesday, November 12, 2013

India's imports gained while exports grew negligibly from FTAs: ASSOCHAM study

In the aftermath of signing 15 regional and bilateral free trade agreements (FTAs), while India's imports from these countries and regions increased significantly but our exports to these partner countries either stagnated or registered minimal growth, according to a just-concluded study undertaken by apex industry body The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

India has signed as many as 15 FTAs including preferential trade pacts, while 19 are under negotiations and eight are in the pipeline but India is still grappling with slow growth of exports and sluggish foreign direct investment (FDI) flows from its FTA partners, said Mr D.S. Rawat, secretary general of ASSOCHAM.

These engagements have achieved limited results in terms of increasing trade volumes with member countries and thus main objective of these market opening pacts is only partially being met, said Mr Rawat. There is an urgent need for the government to revisit its strategy of FTAs, bring greater transparency and involve more effective administrative process in their design and implementation to make FTAs more beneficial for India.

Out of the seven major trading partners viz., ASEAN (Association of South-East Asian Nations), Indonesia, Japan, Malaysia, Singapore, South Korea and Sri Lanka with whom India has operationalised FTAs, it has trade surplus with only Sri Lanka and Singapore, highlighted the study prepared by the ASSOCHAM Economic Research Bureau (AERB).

Even on the investment front these free trade pacts have not given any extra edge to India so far as during April 2000-June 2013, India received FDI worth $1.25 billion (bn) and $14.75 bn from South Korea and Japan respectively and this year during April-June, India attracted only $224 million worth FDI from Japan while the figure was $2.23 bn in 2012-13 and $2.97 bn in 2011-12.

Considering the negative impact of these agreements on India's manufacturing sector, ASSOCHAM has suggested that trade agreements should be 'self-regulatory' to evade scope of 'safeguard measures' and the advanced partners must not be allowed to salvage Surplus capacities through exports and exploiting concessional duty rates under trade agreements.

Besides, it should be seen that trade agreements do not become a means to fill the country's short-term supply-deficit through exports made at concessional duty rates as it adds an anti-competitive element vis-vis imports from other countries. Therefore, it needs to be complemented with Specific & Time-bound commitment for inflow of Investment, otherwise the purpose of a Trade Agreement gets defeated, highlighted the ASSOCHAM study.

Considering that India's negotiations for comprehensive FTA with European Union (EU) are at an advance stage, ASSOCHAM has suggested the Ministry of Commerce and Industry to from a special team of experts to negotiate FTAs, besides the government should organize FTA outreach programmes to create awareness amid various stakeholders.

As the feasibility/joint studies conducted by the government before commencing talks for any FTA form the basis of negotiations, ASSOCHAM has also suggested for broadening the base of such studies and inviting participation from various stakeholders like academicians, representatives of the marginal, small and medium enterprises (MSMEs) and state government officials. Besides, Indian embassies in these countries should also be engaged to gather sensitive information while conducting such studies.

Other significant points suggested by ASSOCHAM include - constant updation of publically accessible information, consultation with governments at state level before finalizing the pacts, emphasis should be laid on sectors lucrative for domestic players and tariff rates of specific sectors where Indian traders can penetrate aggressively must be looked at.

So far, India has concluded 10 Free Trade Agreements, 5 Limited scope Preferential Trade Agreements and is in the process of negotiating or expanding 17 more Agreements. Besides, at least 9 more proposals for FTAs are under consideration and when completed, these Agreements would cover over 100 countries spread across 5 continents.

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Exports at 2-year high of 12.47%, trade gap widens

New Delhi : Recovery in global markets pushed the country’s exports to a two year high of 13.47% to $27.2 bn in October even as trade deficit worsened on account of rise in gold imports.

Commerce Secretary S R Rao said improvement in western markets have helped in pushing the exports. “Exports have shown a significant increase and imports fell significantly…All the regions are doing well. We see no concerns. Only South Asia and Latin America are marginally low,” Rao added.

In April-October, exports grew by 6.32% to $179.38 bn, while imports during the period contracted by 3.8% to $270.06 bn. Rao expressed confidence that the country would achieve the $325 bn target for the current fiscal.

“All the major sectors (engineering, textiles and gems and jewellery) having significant contribution have shown a positive growth trend,” he added. Engineering exports grew by 36% to $5.6 bn in October.
Rao said that gold and silver imports in October grew due to the clearing of air on a RBI norm for gold imports.

The RBI’s 80:20 scheme for gold imports had left many confused, leading to imports being held up at customs. Gold and silver imports increased to $1.3 bn in the month under review from $0.8 bn in September, 2013.

Reacting to the export numbers, India Inc urged the Government to restore duty drawback rates to bring down the trade deficit. “CII strongly recommends restoration of Duty Drawback Rates which have been reduced drastically last month. This will further help in gaining and maintaining India’s share in the global market,” Sanjay Budhia, Chairman, National Committee on Exports and Imports of CII saidsaid.
Duty drawback is the refund of duties on inputs imported for export items.

The government had recently rationalised the duty drawback and brought more items under the scheme for tax refund to exporters. It had reduced the rates for different engineering items.
Trade deficit jumps to $10.55 bn.

Meanwhile, the government data showed that the country’s trade deficit rose to $10.55 bn in October after narrowing to two-and-a-half-year low of $6.7 bn in the previous month as purchases of gold and silver picked up ahead of the festive season.

The value of gold imports jumped to $1.37 bn in October as compared to $800 mn in the previous month.

“Curbs on gold and silver imports have worked,” Rao said adding there were positive trend in India’s foreign trade as exports growth was consistent.

Cumulative trade deficit for April-October period of the current financial year is recorded at $90.68 billion, sharply lower than $112.03 billion registered in the corresponding period of last year.

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Government likely to double export target to $1 trillion

NEW DELHI: The government is expected to double the export target to $1 trillion in the next five-year foreign trade policy even though the current policy that runs until March 2014 is all set to miss the $500-billion target set for exports.

A senior commerce department official told that the government has begun work on the foreign trade policy for 2014-2019, which will aim at doubling India's share in global trade from the current 3%. The policy is, however, expected to be announced only after the new government assumes office after the general elections next year.

"After the very successful 2009-14 foreign trade policy, we have started working towards the policy for the next five years," the commerce department official said. "Consultation process has started for that. We want to focus on the high-value exports and import substitution, such as engineering, aeronautics, cars, where value addition is the highest."

The proposed 2014-19 policy would include measures to make the country's outbound shipments more competitive by boosting productivity and generating exportable surplus.

"It will require support from the government to provide support for marketing, export infrastructure including improved logistics, keeping in mind the current situation of CAD (current account deficit)," said an inter-ministerial note moved for consultation on the new policy.

People aware of the consultations said the government is likely to set the export target for the new policy at around $1,000 billion.

The inter-ministerial note also explains the proposed policy would include a long term and a medium-term strategy to enhance trade competitiveness and overall growth of India's foreign trade.

Since 2009, India's exports have nearly doubled from $178 billion in 2009-10 to about $325 billion. The foreign trade policy for 2009-14 provided fiscal incentives to traditional sectors in the form of interest subvention and other duty neutralisation schemes to provide refund of indirect taxes and levies.

It focused on export promotion of capital goods and market diversification and product diversification. Incentives were provided under focus product and focus market schemes to encourage exporters to explore markets like Latin America and Africa.

The share of exports to Latin America has gone up from 2.9% in 2008-09 to 4.5% in 2012-13. India's rising current account deficit has prompted the government to promote import substitution through the new policy. India's CAD widened to a record high of 4.8% of the GDP in 2012-13 and 4.9% of the GDP in the first quarter of the fiscal.

After remaining muted for a year, India's exports grew in double-digits in the three months starting July, expanding by 11.2% in September.

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RBI permits third party payments for export, import transactions

The Reserve Bank of India (RBI) on Friday permitted third party payments for export/import transactions subject to certain conditions.

Among the key conditions RBI said that for export transaction firm irrevocable order backed by a tripartite agreement should be in place while for import transactions firm irrevocable purchase order / tripartite agreement should be in place.

RBI also said that for the export as well as import transaction third party payment should come from a Financial Action Task Force (FATF) compliant country and through the banking channel only.

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Analysts happy with fall in imports by India, growing exports

India’s exports kept up the pace for the fourth straight month by expanding at 13.5% -a 24 month high. Imports too declined in Oct’13, though the pace slowed down a little. Non-oil imports declined by 22.8%, with oil imports posting a marginal pick-up in growth. Cumulative trade balance was at $90.7 billion during Apr-Oct’13.

"The good thing is that gold imports did not show a significant turnaround in Oct’13, though on a sequential basis such imported jumped by 71.3%. Also, India has gained in market share in apparel exports to USA in current fiscal, an encouraging development," said State Bank of India in a note.

India’s exports registered a growth of 13.5% in Oct’13 to $27. 3 billion from $24. 0 billion in corresponding month of last year. This is the fourth straight month of double-digit growth in exports and pace of growth in Oct’13 is the highest in last 24 months. Cumulative value of exports for the first seven months of FY 14 (Apr-Oct) were valued at $179. 4 billion as against $138. 7 billion, registering a year on year growth of 6.3%.

If Oct’12 export figures were not revised, export growth would have been lower at 9.5%.

Imports during Oct’13 were valued at $37.8 billion, a negative growth of 14.5% over the level of imports valued at $44. 2 billion in Oct’12. Oil imports in Oct’13 were valued at $15. 2 billion, 1.7% higher than $15. 0 billion in the corresponding period last year. Provisional data showed that gold import increased to $1.4 billion in Oct’13 from unrevised $800 million a month earlier, a growth of 71%. However, the good thing is that Oct’13 gold import is still 80% lower in value terms against the gold import of the same period last year.

"We continue to maintain a trade deficit at $170 billion for FY14, with a CAD at $55 billion / 3. 1% of GDP, with downside," it added.

"A significant decline in gold imports and weak capital and consumption goods’ imports, due to subdued domestic demand, will help lower growth in non-oil imports during rest of this year," predicted CRISIL Research. "Improvement in exports due to a weak rupee, low base and improved global demand, will also aid in lowering trade deficit in 2013-14. Lower merchandise trade deficit, along with a healthy growth in IT/ITes exports, create downside to our forecast of current account deficit at 3.9 per cent of GDP for 2013-14," it said.

"We expect the current account deficit to moderate to USD 54bn in FY14 (year ending March 2014) from USD 88.2bn in FY13 due to better exports, weak domestic demand and a policy-driven reduction in gold imports," said brokerage Nomura. "Large inflows under the FCNR(B) deposit scheme and the delayed QE taper have led to a surge in capital inflows since September. However, with the FCNR (B) deposit window to close soon (by end-November), oil marketing companies’ demand gradually being shifted back to the market and changing expectations around the US QE taper (our US economists now assign a higher probability to a taper in January 2014 relative to March 2014), financing may remain a challenge," it added.

“The EXIM Trade Data released today reaffirmed the reversal of negativity," said Sanjay Budhia, Chairman of CII's National Committee on Exports & Imports. "Exports since last 3 months, from August , September and October 2013, have come to positive growth trajectory due to stability in the global market, particularly with our large trading partners like US and Europe.

"Also the timely Intervention by the Commerce Ministry in terms of expanding Focus Product and Focus Market Scheme have helped Indian Exporters to withstand the vagaries of tough competition. CII strongly recommends restoration of Duty Drawback Rates which have been reduced drastically last month. This will further help in gaining and maintaining India’s Share in Global Market," he added.

SBI noted that the incremental share of price sensitive items in Indian exports has been higher in current fiscal, though the pace has slowed down a bit in recent months.

The bank's research team has an export target of $320 billion for this year, nearly matching the Government target.

"In principle, coming festive season would further boost export demand in the developed economies aiding trade deficit to narrow down to a comfortable zone," it said.

However, cumulative oil imports in Apr-Oct FY14 were $98. 1 billion, 3.3% higher than the oil imports of the corresponding period last year. Meanwhile, non-oil imports contracted for the fifth consecutive month in row to $22.6 billion at 22.8% lower compare to Oct’12. H owever, tracking the trade deficit on a month on month basis, trade deficit increased in Oct’13 after having declined to a two-and-a-half-year low the previous month.

The deficit widened to $10.6 billion from $6.8 billion in Sep’13. A year earlier, the gap was $20.2 billion. Widening trade deficit in Oct’13 was aided by higher oil and gold demand. India’s share in the US textile import has remained promising. In the first eight months of 2013 (Jan- Aug) , India’s share has increased to 6.2% f rom 5.8% in 2012 and 5.9% in 2011. Further recovery in the US would add to the domestic export revenue.

"Imports contracted 14.5% y-o-y in October compared with a decline of 18.1% in September, which reflects continued weakness in domestic demand.Overall, global demand is improving, but higher imports (of oil, gold and others) have led to the deterioration in the trade deficit. The rise in imports is due to seasonality, as imports tend to rise ahead of the festival season. On a seasonally adjusted basis, we estimate that the trade deficit narrowed to USD7.3bn in October from USD7.5bn in September," Nomura said.

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Monday, November 11, 2013

Row over export of fresh vegetables to Saudi Arabia.

Saudi Arabia the fifth-largest importer of fresh vegetables from India, has said pesticide residues in the commodity are higher than permissible levels. It has threatened to take strong action in the near future.

In an advisory to the Agricultural and Processed Food Products Export Development Authority (Apeda), the government of Saudi Arabia said high levels of pesticide residues were detected in two consignments of green chilli. "It has been brought to the notice of authorities of KSA (Kingdom of Saudi Arabia) that in some recent consignments of vegetables from India, there have been interceptions of higher than permissible levels of residues of pesticides. If the situation persists, the government of KSA will take strong action in the near future," the advisory said.

Saudi Arabia accounts for Rs 92 crore of annual imports of fresh vegetables from India. With Rs 284 crore of imports, Pakistan was the largest importer in 2012-13, followed by the UAE (Rs 255 crore) and the UK (Rs 151 crore). With Rs 143 crore of fresh vegetable imports, Nepal was fourth on the list.

“Volume is not a worry. The only worry is the action, as prescribed by the Saudi Arabian authorities. If they ban vegetable imports from India, other countries in West Asia may follow, impacting India's overall vegetables exports severely,” said Vinod Kaul, deputy general manager and head (horticulture), Apeda.

Though Saudi Arabian authorities haven't specified the permissible limit of pesticide residue, it is usually understood the specifications by the European Union are applicable. Specifications by Codex, as well as other global norms, are also understood to be applicable on fresh vegetable exports to Saudi Arabia.

In an advisory to exporters, Apeda has advised adherence to the import requirements of Saudi Arabia, adding products should be tested before exports. “As a region, West Asia is very important to us. We, therefore, do not want any strong action by Saudi Arabia, and its repercussion on other countries in the region. Hence, we have advised our members to test export oriented goods carefully before shipping,” said Kaul.

West Asia accounts for about a third of India's overall fresh vegetable exports. I 2012-13, total exports of fresh vegetables stood at Rs 1,334 crore, a rise of 2.7 per cent compared with Rs 1,299 crore in 2011-12.

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