Lok Sabha Question No. 75 (UNSTARRED), answered on 2017-07-17
Subject: Cashew Industry
Ministry: COMMERCE AND INDUSTRY
Asked by: N.K. PREMACHANDRAN

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY (DEPARTMENT OF COMMERCE)

## LOK SABHA

## UNSTARRED QUESTION NO. 75 TO BE ANSWERED ON 17 th  JULY, 2017

## CASHEW INDUSTRY

## 75. SHRI N.K. PREMACHANDRAN:

Will the Minister of COMMERCE & INDUSTRY ( वािणÏय एवं उɮयोग मंत्री ) be pleased to state:

- (a) whether it comes to the notice of the Government that the cashew industry is facing a crisis and if so, the details thereof along with the action taken by the Government to promote the cashew industry;
- (b) whether the Government is aware that the cashew industry depends on imported raw cashew nuts;
- (c) if  so,  the  action  taken  by  the  Government  to  provide  sufficient  quantity  of  raw cashew nuts to the industry;
- (d) whether it is a fact that a large number of cashew industries have closed down due to non-availability of raw cashew nuts and if so, the details thereof; and
- (e) whether  the  Government  has  received  complaints/representations  from  Kerala  to change the import-export policy and customs tariff with regard to cashew for saving the industry and if so, the action taken by the Government thereon?

## ANSWER

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## THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY (INDEPENDENT CHARGE) (SMT. NIRMALA SITHARAMAN)

(a)    to (c): No, Madam. However, It  has come to the notice of the Government that due to non availability of sufficient quantity of raw cashewnuts and higher price for raw  cashew  nut  in  the  international  market,  the  cashew  industry  is  facing  the prospect  of  a  demand-supply  gap.  Considering  the  challenges  being  faced  by  the cashew  industry  and  to  promote  the  trade,  the  Government  has  reduced  rate  of Goods  and  Service  Tax  (GST)  to  5%  from  12%  for  Cashew  nuts.  Beside,  the Government is allowing duty free import of raw cashewnuts under Duty Free Tariff Preference  (DFTP)  Scheme  from  Least  Developed  Countries  (LDCs).    Export incentive under MEIS for cashew has also been revised to 3% for all A, B & C group countries.

Considering  the  demand-supply  gap  in  domestic  market,  the  Government  of  India has drawn up strategies to increase domestic production by massive area expansion of cashew  and replacing of senile cashew  plantations with high yielding varieties in traditional  and  non-traditional  states  under  National  Horticulture  Mission(NHM) through State Horticulture  Mission(SHM) and State owned corporations apart from already established cashew  plantations in 10.50 lakh hectare   in various cashew growing states  with yield  of 7.79 lakh Metric Ton of raw cashew nuts.

(d)            The  Government  has  no  such  information  regarding  closure  of  cashew industry due to non-availability of raw cashew nut.

(e) This  Ministry  had  received  various  representations/complaints  from  Kerala regarding revision of Custom Duty on Raw Cashew Nut.  It is stated that exemption from import duty was withdrawn and 5% BCD and 4% SAD was imposed on them by the    Government  w.e.f.  1.03.2016.      Ministry  of  Finance  has  informed  that  the decision was taken on the grounds that a substantial quantity of cashew nuts in shell is  imported for domestic consumption and not for export production and that other nuts in shell attract Basic Custom Duty (BCD) of 10% to 30% in general.  The levy of 5% BCD on import  of  cashew  nut  in  shell  is  neutralized  under  various  schemes. That  being  so,  there  is  no  economic  justification  for  exempting  imports  duty  on cashew nuts in shell for domestic consumption.