India DRI uncovers illegal import of pesticides from China

The Directorate of Revenue Intelligence (DRI), an agency that is a part of the finance ministry, suspects that some individuals and companies are illegally importing a large volume of pesticides from China—in the process bringing into the country pesticides that are banned in India, or avoiding paying the import duty of 26% on pesticides, a so-called restricted item.

Recently, the directorate busted a racket involving the import, over a year, of pesticides worth Rs.100 crore, by labelling them as other goods, according to DRI documents reviewed by Mint.

The law requires an importer to comply with the Insecticides Act, which requires individuals and companies to seek and get prior permission from the Central Insecticides Board (CIB) before importing pesticides.

DRI has booked a few little-known companies for importing pesticides by passing them off as something else, according to the agency. “We suspect the goods are banned. We have sent it for testing. The importers had makeshift offices, so obviously they are front companies, and we are investigating further,” said a DRI official who did not want to be identified.

The importers named by the official are Umesh Impex and Mehta Overseas.

The companies named declined comment on the grounds that the matter is before the courts.

A government official familiar with the investigation and who did not want to be identified said, “It is evident from the investigations so far that the importers are hand-in-glove with the manufacturers and suppliers in China. The bills of entry and the material seized from the importers indicate that the manufacturers have helped the importers camouflage the item and facilitated illegal imports.”

Mint couldn’t immediately ascertain the complicity of the manufacturers, their identity, and, as a result, couldn’t reach out to them.

DRI’s crackdown comes even as the government has expressed concern at the possible import of ingredients that go into pesticides from China.

Earlier this month, India imposed an anti-dumping duty of up to 26 cents per kg on the import from China of a chemical used in manufacturing of pesticides and dyes—a move aimed at protecting the domestic industry. The Directorate General of Anti-Dumping and Allied Duties, an agency under the commerce ministry, recommended the imposition of the duty after an investigation.

According to DRI, pesticide imported illegally through mislabelling and misdeclaration is then repacked at several locations and enters the domestic market.

CIB has stringent rules for the import of pesticides that include various field tests to ascertain that they are not harmful to the environment and human beings.