The Hindu Business Line : `Canalise vanaspati imports from Nepal through Nafed'

The Indian Vanaspati Producers' Association (IVPA) has demanded that duty-free imports of vanaspati from Nepal be canalised through the National Agricultural Cooperative Marketing Federation of India (Nafed).

In a pre-Budget memorandum submitted to the Finance Ministry, the IVPA has said that out of the estimated domestic vanaspati consumption of 14-15 lakh tonnes (lt), imports from Sri Lanka were 2.5 lt, while amounting to 1 lt from Nepal and 50,000 tonnes from Bhutan. In addition to these imports, under the tariff rate quota regime instituted under free trade agreements there was 0.50-1 lt coming in by way of smuggling from Nepal. "Thirty five per cent of the entire domestic market is now being cornered by duty-free imports from these three countries. As a result, domestic vanaspati production has fallen from 14.41 lt in 2001-02 to around 10.5 lt in 2005-06, against an installed capacity of 53 lt. Out of 264 units, 148 are already closed", the Association has noted.

IVPA has suggested that imports of vanaspati from Nepal be canalised through Nafed, as it has already been done vis-à-vis Sri Lanka. It has pointed out that domestic manufacturers were paying a customs duty of 78.2 per cent on the main raw material, crude palm oil. The units in Nepal were, on the other hand, sourcing the same at zero duty, while the Sri Lankan industry was paying a nominal $25 per tonne.

"As a result, the cost of vanaspti produced in India is higher by over Rs 13,000 per tonne. The manufacturers in Sri Lanka, Nepal and Bhutan are selling their product at Rs 4,000 per tonne lower than our leading brands and making a hefty profit of about Rs 8,000 per tonne", the memorandum has added.

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