International Trade Customs
China has imposed customs duty on guar exports from India which is costing India in global market share and disadvantage to the guar gum exporters from India. China has imposed customs duty of 7% on the guar splits and 15% on guar powder. However, the import of guar export from Pakistan is duty free.
Guar gum industry feels that Indian guar gum is qualitatively superior to guar gum in Pakistan. The custom duty imposed by China on the guar gum export from India will enhance export of about Rs 300 crore of Indian guar gum.
Due to the higher duty on guar powder, India's export to China is decreasing while exports of refined guar gum splits are increasing. China accounts for 25% to 30% of the total exports of guar gum splits. Over the last several years, many manufacturing units have come up in China to manufacture the value-added finished guar gum powder from refined guar gum splits. The Chinese manufacturer is getting advantage over Indian guar gum powder manufacturers in the world market because of the custom duty imposed on Indian product. As a result, there is a reduction in the exports of value-added products like guar gum powder from Indian manufacturer.
Guar gum is primarily the ground endosperm of guar beans. It also called guaran. The guar seeds are dehusked, milled and screened to obtain the guar gum. Guar gum is and used as an important lubricant in the drilling of oil wells across the world. Guar gum refined split is refined endosperm derived from guar seed or cluster bean. Guar gum refined split is mechanically separated from guar seed which yields 28-30% of refined split.
India is the lead producer of guar gum (80%) followed by Pakistan. US, China and Europe are the major importers of guar gum. India exports nearly 70 % of its produce to the oil producing countries including Gulf countries, the US and European nations. In FY 10, the export of guar gum from India was 220,000 tonnes and it is expected that the exports of guar gum from India in FY11 is likely to be in the range of 270,000- 260,000 tonnes. An increase in demand from the oil sector with the rise in crude oil prices and lower supplies from Pakistan as its crop was destroyed due to floods will increase the export of guar gum from India.
There is also a disparity in the export duty structure of sesame seeds.
Guar Gum - Guar gum, also called guaran, is a galactomannan. It is primarily the ground endosperm of guar beans. The guar seeds are dehusked, milled and screened to obtain the guar gum. It is typically produced as a free-flowing, pale, off-white colored, coarse to fine ground powder. It is used in industries such as textile, paper, cosmetics etc.
See Also Specifications of Guar Gum