Withdrawal of sops makes exporters jittery

KOCHI: The proposed withdrawal of export incentive ' Duty Entitlement Pass Book' scheme (DEPB) after June will adversely affect agri-commodites like spices, tea, coffee, cashew and seafood. Apart from losing the edge in global markets, it will also hit the earnings of the producer, according to exporters.

If there is no alternative to DEPB, then exports may face a slump post-June, they say. "Instead of rewarding the exporters for good performance, it is like punishing them," said Ramesh Rajah, president of Coffee Exporters Association.

Coffee exports had touched a new peak in last year. "Scrapping the DEPB incentive of 4% for coffee exports will mean that we will be forced to pay less to the producer. This, in turn, will bring down coffee production in the long term. Already coffee production is stagnating under 3 lakh tonnes," Rajah said. For tea exports, DEPB incentive is 7%. "At a time when tea prices are down, removal of DEPB will hit the sales. The producers will be reluctant to sell their produce," said a tea exporter Krishnakumar Shah.

Several spice exports will be hit by the proposed step with consumer packets being the worst affected. "It will be difficult for us to compete with Guatemala in cardamom export in the global market without the incentive. The competitors will take advantage of the situation," said SPGR Nityanandan, senior partner of cardamom exporting company SPG Ramaswamy Nadar & Sons.