DRI's NOC a must for duty-free import of edible oil from Bangladesh

Bangladesh was found to be violating the rules of origin under the South Asian Free Trade Area (SAFTA) rules and regulations

The government has toughened norms for the import of refined and crude edible oil from Bangladesh to prevent their illegal dumping into India.

From now on, no import of crude and refined edible oil will be cleared without a 'no objection certificate' from the Directorate of Revenue Intelligence (DRI).

A DRI notification, dated September 25, stated that imports of crude and refined edible oils from Bangladesh are in contravention of the rules of origin under the South Asian Free Trade Area (SAFTA) rules and regulations. This has resulted in substantial evasion of customs duty.

“It is, therefore, requested to give necessary instruction to the field formation so that no such consignments of edible oils in the form of refined/crude imported availing SAFTA benefit should be cleared without ‘no objection’ from DRI, Kolkata,” said the notification.

Under SAFTA, Indian processors import crude and refined edible oil at ‘nil’ duty as against import duty of up to 59.4 per cent levied on their import directly from major producing countries including Malaysia, Indonesia, and Argentina. The SAFTA agreement, however, mandates 30 per cent of value-addition in imported goods, which is impossible for commodities like crude and refined edible oil.

Based on complaints filed by several industry bodies, including the Solvent Extractors’ Association (SEA), the DRI found cases of violation of the rules of origin. 

SEA claimed that a small quantity of refined oil used to be imported from Bangladesh and other SAFTA countries, including Sri Lanka and Nepal, but its import intensified through land route.

“Similar action is also required for edible oil and vanaspati import from Sri Lanka and Nepal,” said Davish Jain, Chairman, Soybean Processors Association (SOPA). Sources said that such action is under active consideration of the government.

India imports around 67 per cent of its 25 million tonnes of annual edible oil consumption.