Huge quantities of caffeine, both crude and pure, are being regularly imported into the country by two Mumbai-based operators evading anti- dumping duty running into crores of rupees, it is learnt. The import consignments are coming through mainly JNPT port and some quanitities are also reaching the country through Chennai port.

According to an industry estimate, the two companies have imported nearly 130 tonnes of caffeine during a period last ten months. Some of the import consignments have shown Singapore and Dubai as the countries of origin although there are no manufacturers of this substance in these countries.

Caffeine is used in pharmaceuticals and soft drink industries in the country and the domestic production of 200 tonnes is sufficient to take care of the local demand. The commerce ministry imposed a maximum anti dumping duty of Rs 100 per kg depending on the purity of the material from 2001 to check the large scale imports of caffeine at very low prices to protect the domestic industry.

Informed sources said that the price of caffeine has been steadily falling for last many months and is currently ruling at around Rs 380 per kg in the market. The price used to be in the range of Rs 450 to Rs 500 per kg an year ago. For the domestic manufacturers any price lower than Rs 450 is unviable.

The sources said that most of the caffeine imports are coming under advance license route and such imports are free of all import duties. For such imports, it was also not compulsory to have a registration of the exporting company with the Drug Controller General of India. Thus, there is no registration of any caffeine exporter from China or European Union in the records of the DCGI. Anti dumping duty has been imposed only on importers from China and EU.

Caffeine importers are said to be taking advantage of some loopholes in the law to push the imported caffeine into the domestic market. As the export obligation under advance license has to be met effectively only after 24 months of the import of the material, importers get ample time for the misuse of this facility.

Secondly, there is a provision for sale of 25 per cent in the domestic market for the advance license holders. A lot of imported caffeine is getting into the market by doing a minor processing of crude caffeine into pure.

The sources point out that there are no figures to indicate export of any caffeine-based products or pure caffeine of these importers whereas customs have figures of their caffeine import. As this violation is complicated to track down and check by the commerce ministry, agencies like Directorate of Revenue Intelligence need to intervene, the sources added.