Govt Cuts Import Duty on Crude, Refined Palm Oils Under ASEAN, IMCECA Pacts

Govt Cuts Import Duty On Crude, Refined Palm Oils Under ASEAN, IMCECA Pacts

After a sudden increase in edible oil prices in the past two months, the Centre has relaxed the import duty on crude oil and refined palm oils.  The import duty on refined palm oil reduced from 50% to 45%, while that on Crude Palm Oil (CPO) reduced from 40% to 37.5% with an immediate effect.The move was opposed by the industry saying that it will hurt the domestic refiners. The duty cut has been made under the ASEAN agreement and the India-Malaysia Comprehensive Economic Cooperation Agreement (IMCECA).

After the reduction in the import duty, the Solvent Extractors' Association of India (SEA) opposed the move. The tax difference between Crude Palm Oil (CPO) and refined palmolein has reduced from 10% to 7.5%.

SEA Executive Director BV Mehta said that,"This will have serious impact on domestic palm oil refining industry and oilseeds farmers. They also fears that import of refined palmolien would increase and also the capacity utilisation of our industry would be affected and this may also leads to potential loss of employment in our country". After a long time, the domestic oilseeds had started selling their produce above the Minimum Support Price (MSP). He also added that,"Lower import duty would make it difficult to defend MSP and the new found enthusiasm of the oilseed farmers would be dampened".

The country's edible oil imports are now touching 70% of the consumption. The duty cut would be counterproductive and contrary to the government's stated objective of increasing domestic oilseed production, he added.