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    Govt. temporarily suspend several spice imports

    February 22, 2019

    Cabinet approval has been granted to temporary suspend imports of several spices including pepper, nutmeg, tamarind and arecanut in order to protect local farmers, Deputy Minister of Development Strategies and International Trade Nalin Bandara said in Parliament Wendsday (20).

    Kicking off the debate on two orders under the Sri Lanka Export Development Act, Bandara said that spice re-exporting rackets had been carried out by unscrupulous exporters fraudulently enjoying tax relief under free trade agreements.“The exporters had imported spices from countries like Vietnam and Indonesia and re-exported them to India and Pakistan as Sri Lankan grown spices. As a result of this racket, prices of locally manufactured spices have decreased rapidly and our farmers had to endure huge financial difficulties due to the lack of demand. Under the Indo-Lanka Free Trade Agreement (FTA) a stock of 2,500 tons of pepper could be exported to India duty free. These exporters used such advantages to derive profits fraudulently,” Bandara noted.

    He said that the proposal to temporarily suspend spice imports was presented by the Minister of Development Strategies and International Trade Malik Samarawickrama.Furthermore, Bandara said that under the Orders which were taken into the debate, several taxes imposed on imported sanitary napkins would also be scrapped. Apart from a 30 percent Cess tax would be imposed on imports of polypropylene bags.

    Further, he said, “14.3% of export income is from condiments but there were many issues with regard to the condiments sector especially with regard to pepper, areca nut, tamarind, nutmeg, cinnamon etc. There is a huge demand and value for Sri Lankan black pepper. Sri Lankan pepper and cinnamon is known to be the best in the world, but during the past few years the farmers growing these condiments have been facing serious difficulties and they even launched many protests drawing attention to their issues. This is a quite rightful demand. Therefore, the decision to temporarily suspend spice imports was made to protect the local spice cultivators.

     

     

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