Trade tussle afresh? – Firstpost

China has rejected at least three consignments of Indian dried red chillies and suspended imports from three Indian exporters after detecting excessive levels of methamidophos residues, The Hindu BusinessLine reported, raising fresh concerns over tightening quality scrutiny by Beijing and its potential impact on India’s agricultural exports.

The development comes just months after Chinese authorities raised concerns over Indian rice shipments, prompting industry observers to question whether stricter food safety checks could emerge as a broader challenge for Indian farm exports to the country’s largest trading partner.

According to the report, China, the largest overseas buyer of Indian dry red chillies, has suspended imports from three Indian firms after tests allegedly found residue levels of methamidophos above permissible limits. The pesticide is considered highly toxic and can affect the nervous system.

The move has unsettled exporters, many of whom depend heavily on the Chinese market, which consistently accounts for more than one-third of India’s red chilli exports.

India exported around 2.36 lakh tonnes of chillies to China during FY25, a 31 per cent increase from the previous year and the highest level on record. Overall chilli exports from India rose 19 per cent to 7.15 lakh tonnes during the financial year, compared with 6.01 lakh tonnes in FY24.

China’s demand is driven largely by its oleoresin extraction industry, food processors and culinary sector. The country primarily imports the Teja variety of chilli from India for oleoresin production.

Recent concerns involving both rice and chilli shipments indicate that Chinese regulators are intensifying scrutiny of pesticide residues and other food safety parameters, he added.

Trade sources cited by The Hindu BusinessLine said China significantly increased purchases of Indian chillies in 2024-25, taking advantage of lower domestic prices and building inventories. However, demand has reportedly softened this year due to higher carry-over stocks and a rise in chilli prices following a smaller crop in India.

Around 3,000 containers of chilli are estimated to have been shipped to China so far in 2025-26. Of these, 10-15 per cent reportedly encountered quality-related issues, including excessive moisture content and pesticide residue concerns.

The report said rising chilli prices have encouraged Chinese buyers to seek lower prices from suppliers, bringing product quality under greater scrutiny. Excess moisture content has emerged as a major issue, attributed to shortcomings in post-harvest handling and quality-control practices.

Despite the concerns, none of the affected consignments have reportedly been returned. Instead, importers and exporters are negotiating price discounts to compensate for quality deficiencies.