Duty cap on raw edible oil imports hailed

"So effectively, only refiners and vanaspati (hydrogenated oil) manufacturers can import crude edible oils on an import duty of 16.5 percent," Mehta said.

Analysts said this actual user condition was a new introduction with a view to capping excessive imports by traders.

Last Thursday, the government raised import duty on refined edible oils to 27.5 per cent from 16.5 per cent to stem a rise in imports.

It kept import duty on crude edible oils unchanged at 16.5 per cent, but through a circular specified that only processors can avail of this benefit of lower duty.

"The effective duty payable by traders to import crude edible oils now works out to 38.5 per cent compared to the earlier duty of 16.5 per cent," said Bombay Oils & Oilseeds Ltd president Navinbhai Shah.

A food ministry official in New Delhi said on Monday the circular issued last week states that crude vegetable oil imports were subject to actual user conditions.

"This is to support the processing industry and improve capacity utilisation," the official said.

"Effectively only those who have processing facilities will be importing crude oil," he said.