Natural honey - Minimum Export Price (MEP) fixed @ US$ 2000 per Metric Ton – no justification given means an arbitrary decision.

[DEVKUMAR KOTHARI]

Natural  honey - Minimum Export Price (MEP) fixed @  US$ 2000 per Metric Ton – no justification given means an arbitrary decision.

Vide Notification No. 75/2023 , Dated: 14th March, 2024 , the Central Government has fixed   MEP of  US$ 2000 per Metric Ton (PMT), till 31st December, 2024 or until further orders, whichever is earlier."

The present price of US$ is INR 82.89 this means MEP fixed is Rs.165780 per MT and Rs.   165.78 per kg.

On web we find retail price of natural and pure honey in small packages for consumers in India starting from Rs. 300 per kg. If we take one-third of it it will be Rs.100 per kg for large packages in wholesale market.

One dealer offers as follows for export per MT:

Our Company offer 100% pure natural bee and flower honey and also special sundorbon forest in bangladesh honey @ 750 usd per ton

In view of such information as available on net, MEP fixed appears to be arbitrary and not justified.

There can be several reasons for export price being higher or lower from time to time.  Therefore, fixing a MEP is not always a proper solution of any problem, if any.

Another problem is about existing contracts. The exporter may be in difficulty if his agreed price is less than MEP fixed.

The notification reads as follows with highlights added:

Notification - DGFT - Foreign Trade Policy

Ministry of Commerce & Industry

Department of Commerce

Directorate General of Foreign Trade

Vanijya Bhawan, New Delhi

Notification No. 75/2023

New Delhi, Dated: 14th March, 2024

Subject: - Imposition of Minimum Export Price (MEP) on export of Honey.

S. O. (E) - In exercise of powers conferred by Section 3 read with section 5 of the Foreign Trade (Development & Regulation) Act, 1992 (No. 22 of 1992), as amended, read with Para 1.02 and 2.01 of the Foreign Trade Policy, 2023, the Central Government hereby imposes Minimum Expert Price (MEP) on export of Natural Honey under ITC HS code 0409 00 00 of Schedule 2 of the ITC (HS) Export Policy, 2023, as under: -

Tariff item HS Code	Item description	Export Policy	Policy condition
0409 00 00	Natural Honey	Free	Subject to a Minimum Export Price (MEP) of US$ 2000 per Metric Ton (PMT), till 31st December, 2024 or until further orders, whichever is earlier."

2. The Notification will come into immediate effect. Transitional arrangements under Para 1.05 of Foreign Trade Policy, 2023 will be applicable.

3. Effect of this Notification:

Export of Natural Honey is 'Free'. Minimum Export Price (MEP) of US $ 2000 per Metric Ton (PMT) is imposed till 31st December, 2024 or until further orders, whichever is earlier."

(Santosh Kumar Sarangi)

Director General of Foreign Trade

Ex-Officio Additional Secretary, Government of India

E-mail: dgft@nic.in

[Issued from File No. 01/91/180/879/AM08/EC/Vol.8/Part File/e- 38272]

Observations:

In the notification, reference for public interest,  any reason or justification has not been given for fixing MEP.

 There is no mention about any representations made by farmers, natural honey producers, and other  trade and industry or consumers groups etc.

 There is no mention about present prices in India and elsewhere and need to impose MEP.

There is no mention about shortage of natural honey in India causing excessive prices in domestic markets and need to maintain reasonable price for domestic consumers.

We do not find even any reference of earlier MEP fixed at any time in past if at all.  The notification mention that at present it is free.  Issue of this notification shall imply that henceforth Import and Exports of natural honey shall be  be deemed to be goods the import or export of which has been prohibited under section 11 of the Customs Act, 1962 (52 of 1962) and all the provisions of that Act shall have effect accordingly.

Therefore, issue of this notification can have serious procedural and legal consequences.

Why the notification has been issued is an intriguing to any exporter as well as consumers.

Power to make such notifications- relevant provisions with highlights added

Power or authority is derived from the provisions of THE FOREIGN TRADE (DEVELOPMENT AND REGULATION) ACT, 1992 No.22 OF 1992 (7th August, 1992) in short

FTDR Act

The preamble o the Act is as follows:

An Act to provide for the development and regulation of foreign trade by facilitating imports into, and augmenting exports from India and for matters connected therewith or incidental thereto.

Section 3 and 5 of the FTDR ACT reads as follows:

Foreign Trade (D&R) Act 1992

CHAPTER II

POWER OF CENTRAL GOVERNMENT TO MAKE ORDERS AND ANNOUNCE ¹[FOREIGN TRDE POLICY]

Powers to make provision relating to imports and exports.

3. (1) The Central Government may by Order published in the Official Gazette, make provision for the development and regulation of foreign trade by facilitating imports and increasing exports.

(2) The Central Government may also, by Order published in the Official Gazette, make provision for prohibiting, restricting or otherwise regulating, in all cases or in specified classes of cases and subject to such exceptions, if any, as may be made by or under the Order, the ¹[import or export of goods or services or technology].

²[Provided that the provisions of this sub-section shall be applicable, in case of import or export of services or technology, only when the service or technology provider is availing benefit under the foreign trade policy or is dealing with specified services or specified technologies]

(3) All goods to which any Order under sub-section (2) applies shall be deemed to be goods the import or export of which has been prohibited under section 11 of the Customs Act, 1962 (52 of 1962) and all the provisions of that Act shall have effect accordingly.

³[(4) without prejudice to anything contained in any other law, rule, regulation, notification or order, no permit or licence shall be necessary for import or export of any goods nor any goods shall be prohibited for import or export except, as may be required under this Act, or rules or orders made thereunder.]

¹[Foreign Trade Policy.

5. The Central Government may, from time to time, formulate and announce by notification in the Official Gazette, the foreign trade policy and may also, in the like manner, amend that policy:

Provided that the Central Government may direct that, in respect of the Special Economic Zones, the foreign trade policy shall apply to the goods, services and technology with such exceptions, modifications and adaptations, as may be specified by it by notification in the Official Gazette.]

Unquote:

The notification must be justified:

Considering the objectives as expressed in the preamble of the Foreign Trade (D&R) Act 1992, as discussed earlier any notification fixing minimum export price of any item must be justifiable in view of facts and circumstances prevailing earlier and recent changes or likely changes, which suggest that MEP should be fixed in public interest. As discussed earlier, there is no reason or justification or public interest is pointed in any manner.

Therefore, the notification appears to be arbitrary and just to exercise powers and that too few days earlier from the expected  day for annulment  of election schedules and it consequences including model code of conduct.