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18% GST on air freight leaves bad taste in the mouths of Indian betel leaf exporters

Say, the move could see Bangladesh, India’s main competitor, gaining. Betel leaf, used in making paan and as mouth fresheners, is mainly exported to the UK, Europe, Saudi Arabia, and Oman.

January 25, 2023 / 05:46 PM IST
Betel leaves for sale at market stand. Image Ctsy: Getty Images

Betel leaves for sale at market stand. Image Ctsy: Getty Images

A revival in betel leaf export from India has been marred by the imposition of 18 percent Goods and Services Tax (GST) on air freight. Exporters fear this may allow India’s main competitor Bangladesh to gain an upper hand in the export markets, particularly the UK, which, with the presence of a large Asian population, has become the top buyer of Indian betel leaves.

Earlier, Pakistan used to be a big consumer of Indian betel leaves which went from Kerala and other places. But the shipments thinned after the Kargil war and gradually stopped, as relations between the two countries soured and Pakistan imposed higher duty for Indian betel leaf.

The market for betel leaf, which is used in paan and as mouth fresheners, in India is concentrated in Kolkata from where it is taken to several countries by air. It goes to Bangladesh, a significant buyer, by road. The UK, Europe, Saudi Arabia, and Oman are the other chief destinations.

Betel leaf exports saw a surge after the registration of exporters for shipments to the UK and European Union (EU) came under the Shellac and Forest Products Export Promotion Council (Shefexil) from September 2021. The council became the competent authority to issue the health certificate, instead of the Agricultural and Processed Food Products Export Development Authority (Apeda).