India trade group wants curbs on palm oil from SAARC

NEW DELHI: An industry group yesterday asked the Indian government to put curbs on duty-free imports of edible oils from South Asian countries under a regional free trade agreement.

Oil imports from South Asian Free Trade Area (SAFTA) members Sri Lanka, Nepal, Bangladesh and Bhutan under a “nil-import duty” arrangement were hurting the domestic industry, the Solvent Extractors’ Association (SEA) said in a letter to Commerce Minister Suresh Prabhu.

It said these imports counteracted India’s efforts to support its local market against cheaper imports of palm oil and other vegetable oils.

The Indian government in March hiked import duty on crude palm oil (CPO) from 33 per cent to 48.4 per cent and in June raised duty on soft oils to 38.5 per cent.

“Cheap imports through member countries are undermining the entire initiative of supporting the farmers as they have distorted domestic prices. This will, in turn, hurt domestic crops and farmers,” the Mumbai-based trade group said.

SAFTA is a free trade agreement of the eight-member South Asian Association for Regional Cooperation (SAARC), which also includes India, Pakistan, Afghanistan and the Maldives.

With imported oils from SAFTA countries being cheaper, traders had shipped thousands of tonnes from Bangladesh and Sri Lanka, SEA said.

The cooking-oil trader group also said earlier, such imports were mainly through the border by road in small quantities but now the “floodgates have opened” with imports coming in via sea.

Arguing that refined palm olein and soybean oil “are not products of SAFTA countries”, it asked the government to check their imports by removing them from the list of products enjoying duty concessions.

India’s total vegetable oil imports in June were a little over one million tonnes, with palm oil’s share being about 48 per cent. — Bernama