The Hindu Business Line : SEA call to raise customs duty on vanaspati imports

THE Solvent Extractors' Association of India (SEA) has urged the Government to raise customs duty on vanaspati imports to at least 80 per cent to provide a level playing field to the domestic vanaspati industry.

Speaking at the 34th annual general meeting of the SEA here on Friday, Mr D.P. Khandelia, President, SEA, said, "Under the Indo-Sri Lankan Free Trade Agreement (ISFTA), vanaspati is being exported to India by Sri Lankan companies with `zero per cent' import duty. The export to India does not meet the value addition norms as prescribed under the ISFTA. Cheap export of vanaspati from Sri Lanka to India is seriously affecting not only the vanaspati industry but the entire vegetable oil complex of our country.''

The country recently imported about 15,000-20,000 tonnes of vanaspati at 30 per cent duty from Malaysia and other countries. The bulk of the raw material for the vanaspati industry is crude palm oil being imported at 80 per cent duty.

Since duty on the finished product was substantially lower than on imported raw material, the indigenous vanaspati industry was under serious threat from import of cheap vanaspati, aggravating the problem of sickness in the industry, he said.

"We appeal to the Government to review the FTA with the Sri Lankan Government and ensure that either vanaspati be placed under negative list of import as a long-term measure and in the meanwhile, the present import be capped at 1 lakh tonne per annum and import be channelised through the Government agency and distributed to defence or under PDS. Alternatively a State-wise monthly quota be fixed so that no region of the country faces a severe impact of the import," Mr Khandelia suggested.

India has entered into FTAs with some neighbouring countries, though for future FTAs import of edible oils & oilseeds have been kept in the negative list.

The Government should review the existing FTAs as early as possible to safeguard the Indian industries, Mr Khandelia said.

He also requested the Government to withdraw the concessional duty of 20 per cent on CPO, which was grossly misused and in reality not used by the soap manufacturers.

On the exports front, he said exports of oilmeals, oilseeds, groundnut oil and castor oil during the current financial year 2004-05 was provisionally reported at 33.6 lakh tonnes valued at Rs 4,612 crore, down from the exports of 40.2 lakh tonnes valued at Rs 5,449 crore in 2003-04.

Imports of vegetable oils for the year ending October 2005 were expected to be in the range of 5.3 to 5.5 million tonnes valued at over Rs 10,500 crore, apart from import of over 200,000 tonnes of vanaspati from neighbouring countries, he said.

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