Govt for imposing 5% safeguard duty on palm oil from Malaysia; DGTR recommends probe into jump in imports

DGTR said it has prima facie found sufficient evidence that the palm oil imports have increased significantly causing serious injury to domestic producers.

Press Trust of India August 26, 2019 19:09:09 IST
Govt for imposing 5% safeguard duty on palm oil from Malaysia; DGTR recommends probe into jump in imports
  • Imposing safeguard duty for a period of 180 days is a move aimed at protecting the interest of domestic players

  • The application for the probe was filed by SEA on behalf of domestic producers

  • The petitioner had claimed a significant decline in production, sales and capacity utilisation for the product

New Delhi: The commerce ministry on Monday recommended 5 percent safeguard duty on imports of a particular variety of palm oil from Malaysia for 180 days, a move aimed at protecting the interest of domestic players.

The ministry's investigation arm DGTR has recommended the duty after conducting a probe into alleged jump in imports of “refined bleached deodorised palmolein and refined bleached deodorised palm oil” from Malaysia, following a complaint from Solvent Extractors' Association of India (SEA).

"The director general recommends the increase in the rate of customs duty on imports of subject goods originating in Malaysia by 5 percent, for a period of 180 days which is considered appropriate to safeguard the interest of domestic industry," the Directorate General of Trade Remedies (DGTR) said in a notification.

Govt for imposing 5 safeguard duty on palm oil from Malaysia DGTR recommends probe into jump in imports

Representational image of palm oil seeds. Reuters.

It said after examining the application filed by the petitioner, it has prima facie found sufficient evidence that the palm oil imports have increased significantly causing serious injury to domestic producers.

The investigation is being carried out under India-Malaysia Comprehensive Economic Cooperation Agreement (Bilateral Safeguard Measures) Rules, 2017. The agreement is a kind of free trade pact under which both countries have reduced customs duties on several goods traded between them.

The application for the probe was filed by SEA on behalf of domestic producers. It had alleged that increase in imports of the oil from Malaysia is causing serious injury or there is a threat of serious injury to domestic producers.

The petitioner had claimed a significant decline in production, sales and capacity utilisation for the product. They have also stated that the market share of Indian industry has declined whereas the market share of imports has increased. The period of investigation was January-June 2019. It also considered the import data of 2016-19.

The product is commonly used to formulate trans-free fats such as margarine, shortening and vegetable ghee.

The notification said imports of the product have increased significantly in the period of investigation (POI) in absolute terms.

"There is a sharp and significant increase in imports of the product during the POI. Imports from Malaysia increased from 6,26,362 MT in 2016-17 to 25,96,225 MT in Jan-June, 2019 (on annualised basis) thus showing an increase of 314 percent. Imports from other countries declined from 23,15,292 MT in 2016-17 to 7,25,210 MT in Jan-June, 2019 (on annualized basis)," it added.

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