Indian oilseed crusher group calls to raise edible oil import tax

NEW DELHI (Aug 20): Oilseed crushers in India have called on the government to increase import taxes on edible oils as part of proposals to make India self-reliant in the sector.

They proposed increasing the duty on crude palm oil (CPO) from 37.5 per cent to 50 per cent, and from 35 per cent to 45 per cent on soybean oil, sunflower oil and other soft oils.

India’s annual consumption is expected to rise from about 23 million tonnes to 27.8 million tonnes by 2025, according to the Mumbai-based Solvent Extractors’ Association of India (SEA).

With 70 per cent reliance on foreign sources, India spends around US$10 billion annually on imports to satisfy consumer demand.

Palm oil constitutes about 9.0 million of the country’s total edible oil imports of 15 million tonnes.

SEA has lobbied the government to increase domestic production of oilseeds and raise barriers against huge imports.

In a new proposal to the government, the trade group said import of edible oils from neighbouring countries under the South Asian Free Trade Area pact should be strictly regulated and refined oils imports should be restricted or prohibited.

It said India should raise local oilseed production from 30 million tonnes at present to 54 million tonnes by 2025, equivalent to 18 million tonnes of oils, to reduce imports to 10 million tonnes of oils.

India imports palm oil from Indonesia and Malaysia, whereas top soft oil suppliers are Brazil, Argentina, Ukraine and Russia.

The country’s efforts to cut import dependence include adding more area to oil palm plantations.

SEA said there is potential to increase oil palm cultivation to 1.9 million hectares from 300,000 hectares now.

It asked the government to target an additional five million hectares of area for oil palm plantations in the next five years.

Source: TheEdgeMarkets