<p></p><p>From a top foreign exchange earner, cashew kernel export earnings have now slipped into negative territory.During 2014-15, India imported raw cashew nut valued at Rs.6,571 crore for processing. But kernel exports during the fiscal were valued at Rs.5,433 crore, clocking a foreign exchange earning deficit of Rs.1,138 crore.During the first eight months of this year, raw nut valued at Rs.6,000 crore was imported but the value of kernel exports during the corresponding period was Rs.2,068 crore, a deficit of Rs.3,932 crore.Cashew processors based in Kollam, who are exporters, said the growing domestic kernel market and the slashing of export incentives had led to the situation. The domestic market potential had triggered wanton import of raw nut. In the past, imports were permitted under strict user conditions. <br></p> <p>Raw cashew nut is a dutiable item. Given the employment generation potential of the commodity, the government, for years, permitted raw nut import as a duty-free item under open general licence subject to conditions.The main condition is an export obligation with 33 per cent value addition within 180 days of import under an indemnity clause.The exporters said this was to ensure actual user terms and conditions in the larger interest of balance of payment transactions through foreign exchange earnings. But as time passed, the conditions were not taken seriously, which led to wanton import of raw cashew for trading too. These days, a good quantity of the raw nut imported was sold in the domestic market to other processors irrespective of whether the sold quantity was processed and exported. Kernel from this lot was reaching the domestic market, especially Delhi and Mumbai.About nine lakh tone of imported raw nut (in a year) and six lakh tone of domestic production yield over four lakh tone of kernel. Given the user condition on import of raw nut, more than 2.25 lakh tone of kernel has to be exported. But last fiscal, 1.19 lakh tone of kernel was exported while the raw nut import was 9.4 lakh tone.<br></p><p></p>