Commodities

‘Slashing customs duty on edible oils counter-productive’

Our Bureau Ahmedabad | Updated on January 30, 2020 Published on January 30, 2020

Low customs duty deepens India’s dependence on imported edible oil   -  STRINGER/INDONESIA

SOPA raises concerns over possible cut in import duty

Edible oil trade body has voiced concern over move to reduce the customs duty on edible oil imports, terming it an exercise against national interest.

In a letter to the Union Commerce Ministry, the Soybean Processors Association of India (SOPA) has stated that edible oil import over the years at low custom duty has discouraged Indian farmers from growing oilseeds and dissuaded them from making any efforts towards increasing productivity. This has resulted in India’s continued dependence on imported edible oil. Such imports have kept edible oils prices low, making it un-remunerative to grow oil seeds.

Edible oil import bill

“India’s edible oil import bill is already over ₹75,000 crore per annum and with rising demand and population, this will further increase, unless all steps are taken to increase oilseed production in the country. Keeping edible oil prices slightly higher is, therefore, absolutely necessary to increase oilseeds production,” DN Pathak, Executive Director, SOPA, said in the letter.

It also noted that ever since the hike in customs duty on edible oils over the last two years, there has been a considerable increase in the prices of soyabean and other oilseeds, resulting in better returns to farmers.

The letter added that edible oils have a very small share in the household food bill, so a slightly higher price does not have any significant impact on them.

“We feel that in view of the reasons given above, any move to reduce customs duty on edible oils will be totally counter-productive and not in the national interest. It will only help the import lobby at the cost of the Indian farmers and local crushing industry,” the letter said, adding that it should be raised to 45 per cent on crude soybean oil, which is the WTO-bound rate, and on all other soft oils, the duty should be increased to the level of permitted tariff rate.

The letter is sent in connection with a proposal being discussed in the Commerce Ministry for changes in the customs duty on edible oils.

Published on January 30, 2020

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.