Industry seeks tariff hike on edible oil imports
Deepak Kumar | The Dollar Business
Indian edible oil industry has expressed hope that an increase of import duty on the inward shipments of vegetable oil will curb its surging imports and protect the interest of the domestic oil industry. Earlier, the Union ministries as well as the oil industry had requested the Ministry of Finance to hike import duty on edible oil to reduce its imports. Congress leader Ahmed Patel urged Finance Minister Arun Jaitely to increase duty on both crude and refined vegetable oils imports and also to announce a policy to encourage domestic production. “We had requested the government to increase the import duty on edible oil because the recent surge in imports has been discouraging for the industry. The request is pending, and we expect to get some update on it soon,” the Solvent Extractors’ Association (SEA’s) Executive Director B V Mehta told The Dollar Business. Vegetable oil import is expected to reach 138-140 lakh tonnes, valued at over Rs. 65,000 crores ($10 billion), in the current oil year ending October 2015. Total import of edible oil stood at 118.0 lakh tonnes during the previous oil year. “India is being used as a dumping ground for excessive supply of edible oils in the world market. (The) Country’s dependence on imported oil has further increased to nearly 70%, an alarming situation for the country’s food security,” said the SEA in a statement. In November 2014-July 2015, import of vegetable oils crossed 100 lakh tonnes, up 26% from 81 lakh tonnes during the same period last year. In July 2015, import of vegetable oils climbed to 15.01 lakh tonnes - the highest in any single month since its import first began in 1994 - up 35% from about 11 lakh tonnes in July 2014. The total imported oil included 22.6 thousand tonnes of non-edible oils and import of edible oil in May 2015 was 13.71 lakh tonnes. Import of Soybean oil in July 2015 stood at 3.49 lakh tonnes, up from 3.10 lakh tonnes in August 2001. “The demand for vegetable oil is rising with the growth of the country’s population. India’s total demand for the vegetable oil is 195 lakh tonnes per annum, and our production is just 172 lakh tonnes. Imposing an import duty on vegetable oil imports will be a positive step,” he said.
September 18, 2015 | 2:54pm IST.