Industry seeks vanaspati import duty hike

The vegetable oil industry, in the run-up to the Union budget, is seeking a duty structure that will boost domestic oilseeds output and reduce dependence on edible oil imports.

For vanaspati, the sector has called for a hike in import duty and wants it in the negative list of free trade agreements, to help safeguard interests of the domestic industry.

The domestic output of oilseeds has failed miserably to meet demand. The country's edible oil consumption stands at 12 million tonne a year of which about 5 million is met through imports. Dependence on imports keeps prices of domestic and imported oils under pressure.

"The present duty structure which has benefited farmers, industry and consumers may be continued but there should be no change in duty except for vanaspati," said Ajay Tandon, chairman of The Central Organisation for Oil Industry and Trade.

The current 30 per cent import duty on vanaspati/hydrogenated fat has been affecting the domestic vanaspati industry as bulk raw material for the sector constitute imported edible oils attracting a 80-90 per cent duty.

Since duty on finished is lower than that on inputs, the domestic vanaspati industry is facing a threat to its sustenance.

"It has been a long-standing demand of the industry to increase duty on finished product to 60 per cent and reduce import duty on inputs to 60-65 per cent," said B V Mehta, executive director of The Solvent Extractors' Association of India.

The vanaspati industry is also being hit by imports from Nepal and Sri Lanka under the FTA.