NEW DELHI India should raise the import duty on refined vegetable oils to 27.5 percent from 20 percent to stem the tide of cheaper overseas purchases, a leading trade body said on Monday.
Higher import duty on vegetable oils could make oilseeds planting attractive for local farmers and help millers improve capacity utilisation, the Solvent Extractors' Association (SEA) said in a statement.
India, which consumes 18-19 million tonnes of edible oil annually, imported a record 14.61 million tonnes vegetables oil in the marketing year to October 2015, as a drop in local oilseed output prompted refiners to boost imports from top producers Malaysia and Indonesia.
The cooking ingredient is India's third highest overseas spend after crude oil and gold, and Prime Minister Narendra Modi has ambitious plans to spend $1.5 billion in the next three years to help farmers grow oil palm trees in an area the size of New Jersey.
The South Asian nation's rapidly growing population and a fall in the planting of oil-rich rapeseed in the winter season have raised fears of higher imports at a time when Argentina, a key soyoil supplier to India, has cut export tax on farm products.
Imports could also turn costlier after Indonesia and Malaysia formed a joint council to maintain higher prices of palm products in the international market.
India should at least double the duty difference between crude and refined vegetable oil from the current 7.5 percent, the Mumbai-based association said.
The SEA also sought a sharp cut in oilseed import tax to 5-10 percent from the current 30 percent to boost local production of edible oils, and exports of the crushed residue used as animal feed.
(Reporting by Sankalp Phartiyal; Editing by Subhranshu Sahu)
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Updated Date: Dec 22, 2015 02:45:12 IST