Claiming that traders were routing edible oils produced in Malaysia and Indonesia through SAARC countries to evade import duties in India, Saurashtra Oil Mills Association (SOMA), a Jamnagar-based organisation of oil millers and oilseed traders, has asked the Centre to restrict duty-free imports of oil to only those produced in the member countries of the block.
In a letter to Union Agriculture Minister Radhamohan Singh, SOMA president Sameer Shah demanded that duty-free imports from eight-member countries of SAARC (South Asian Association for Regional Cooperation) be restricted to commodities produced in the member countries only so that domestic industry of edible oil remains competitive. “In order to encourage farmers to produce more oilseed, and consequently reduce our import dependency of edible oils, you have increased duty on its imports significantly. We appreciate this move and congratulate you for the same. But at the ground level, its desired effects are not seen. This is mainly because these imported edible oils have now started coming to India via South Asian countries like Nepal, Sri Lanka and Bangladesh from which import duty is still zero per cent,” Shah wrote.
India, the largest importer of edible oils in the world, allows duty-free imports of edible oils from SAARC member countries like Afghanistan, Bangladesh, Pakistan, Bhutan, Nepal, Maldives and Sri Lanka. But Shah said that importers had started routing Malaysian and Indonesian palm oil through SAARC countries to evade high import tariffs.
“For your reference, these imported oils, mainly Palmolien oils is produced in countries like Malaysia and Indonesia which are not members of SAARC. To avoid import duty, the goods are dispatched from these countries to be received by us through the invoice of SAARC countries. Due to such practice, we incur loss of import duties and there is not much reduction in our import,” read the letter written by the SOMA president.
Shah said that to avoid duty evasion and protect domestic edible oil industry, India should allow imports of edible oils from SAARC members only if they are produced there. “The zero-import-duty benefits to the SAARC countries should be given only on the commodities produced in these countries. If such a policy is not framed then the motto of the government to encourage domestic produces will not be fulfilled in totality,” the letter stated.