The Indian government has introduced a ban on importing roasted areca nuts priced below Rs 351 per kilogram, aiming to protect local producers from cheap foreign competition amid fluctuating global prices and rising domestic cultivation costs. The Directorate General of Foreign Trade (DGFT) notified the measure on Wednesday under the Foreign Trade Policy (FTP) 2023, effective immediately, as part of broader efforts to bolster agricultural self-reliance under the Atmanirbhar Bharat initiative.

Areca nuts, a key cash crop integral to India's betel quid industry, face persistent challenges from subsidized imports, particularly from countries like Indonesia and Myanmar, which have flooded the market with low-cost variants. This policy aligns with recent interventions in spices and pulses, where minimum import prices (MIPs) have stabilized farmer incomes and curbed illegal trade routes.

The ban targets roasted or processed areca nuts falling under HS code 08028020, stipulating that shipments below the Rs 351/kg threshold—equivalent to about $4.18 at current exchange rates—will be prohibited at customs. This floor price reflects production costs, including labor and processing, estimated at Rs 300-350/kg by industry bodies like the All India Betel Nut Importers Association. Exemptions are carved out for 100% export-oriented units (EOUs) operating in Special Economic Zones (SEZs) and imports under the Advance Authorization Scheme, which allows duty-free raw material procurement for export production.

These carve-outs ensure continuity for value-added exports, such as flavored paan masala and confectionery, where India commands a 70% global share but relies on imported nuts for blending. Last fiscal year, India imported over 1.2 lakh tonnes of areca nuts worth Rs 1,800 crore, with 60% arriving roasted, highlighting the import dependency despite domestic output of 5.5 lakh tonnes annually.

India, the world's largest areca nut producer and consumer, cultivates the crop across 4.5 lakh hectares in states like Karnataka (48% share), Kerala, and Assam, supporting over 6 million smallholders whose livelihoods hinge on stable prices. Global benchmarks hover around $3-4/kg, but dumping below Rs 351/kg has depressed Mandya and Sirsi markets to Rs 250-280/kg in recent months, exacerbating farmer distress amid erratic monsoons and a 15% yield dip in 2024. The Spices Board of India, which oversees areca regulations, welcomed the move, noting it could lift domestic prices by 10-15% and reduce adulteration risks. However, importers caution that the MIP might inflate costs for end-users, potentially raising paan and gutkha prices by 5-8%, and invite retaliatory duties from ASEAN partners under the India-ASEAN Free Trade Agreement.

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This notification underscores the Modi government's agricultural trade reforms, following MIPs on onions (Rs 300/kg in 2024) and similar curbs on areca in 2019 that were later eased. As festive season demand peaks—Diwali alone boosts consumption by 20%—stakeholders anticipate smoother supply chains, though vigilance against circumvention via misclassification remains key. The DGFT has directed customs to enforce the rule stringently, with penalties for violations under the Customs Act, 1962. For exporters, the exemptions provide a lifeline, potentially enhancing competitiveness in a $500 million global market where India's processed nut exports grew 12% year-on-year.

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