India, Vietnam halt trade war on agricultural imports

A Vietnamese farmer collects coffee beans.

Vietnam and India have agreed to relax import bans on each other’s agricultural produce after a period of tit for tat that hurt both countries’ businesses.

India on Friday lifted the ban on the importation of Vietnamese coffee, black pepper, cassava, cinnamon and dragon fruit, according to Nguyen Mai Oanh, vice chairwoman of the Vietnam Pepper Association.

The ban was introduced on March 7 in what appeared to be India’s response to an earlier ban by Vietnam’s Ministry of Agriculture and Rural Development, which blocked all imports of peanuts, cassia seeds, cocoa, common beans and tamarind from the South Asian country, starting March 1.

The Vietnamese ban was attributed to the high risk of Indian nuts being infected with Caryedon serratus, a species of beetle not found in Vietnam and which could be harmful to the Southeast Asian country’s crops.

After reviewing requests from agricultural exporters of both countries, Vietnamese and Indian authorities sat down over the bans and consented to resume bilateral trade of the products, while maintaining strict monitoring measures.

Vietnam exported close to 46,000 metric tons of coffee beans to its South Asian trade partner in 2016, raking in US$79.4 million in turnover, according to statistics from the General Department of Vietnam Customs.

India imported 11,000 metric tons of black pepper worth $84.2 million from Vietnam last year, according to the same source.

Shipments to India make up 2.5 and 6.2 percent of Vietnam’s total coffee and black pepper exports in 2016, respectively.

Nguyen Quang Binh, a Vietnamese coffee expert, asserted that India’s barring Vietnamese produce would not have had a profound impact on Vietnam’s agricultural exports, as the Indian market accounts for only a small fraction of Vietnam’s shipments.

However, Binh noted that India is a significant importer of Vietnam’s medium-quality coffee beans for the production of instant coffee.

The South Asian country imports between 45,000 and 46,000 metric tons of such coffee beans from Vietnam every year, Binh said.