Opposing the reduction in customs duty on edible oils, the Soybean Processors Association of India (Sopa) has pointed out that any move to reduce customs duty on edible oils will be totally counter-productive and will not be in national interest. It will only help the import lobby at the cost of the Indian farmers and local crushing industry, a statement issued by the association said.
Instead of reduction in custom duty, it should be raised to 45% on crude soybean oil which is the WTO bound rate, and on all other soft oils, the duty should be increased to the level of permitted tariff rate, DN Pathak, executive director, Sopa said in a representation to the Union commerce ministry.
In connection with a proposal being discussed in the commerce ministry, for changes in the customs duty on edible oils, SOPA has submitted its views to the government. On the subject of reduction in customs duty on edible oils, Sopa has said that edible oil import over the years at low custom duty has discouraged Indian farmers from growing oilseeds and dissuaded them from making any efforts towards increasing productivity. Such imports have kept edible oils prices low, making it unremunerative to grow oil seeds, he said in the statement. “After the increase in custom duty of edible oils in the last two years, we have seen a considerable increase in soybean and other oilseed prices, resulting in better returns to farmers,” Pathak said.
Sopa says that India’s edible oil import bill is already over Rs 75,000 crore per annum and with rising demand and population, this will further increase, unless all steps are taken to increase oilseed production in the country. Keeping edible oil prices slightly higher is, therefore, absolutely necessary to increase oilseeds production, he said. The share of edible oil in household food bill is very small and slightly higher price does not have any significant impact on this, he explained.
Pathak said that the government at the highest level has already taken a serious note of the alarming and ever rising edible oil import bill. A National Mission on Edible Oil is going to be announced soon with the primary objective of reducing edible oil imports by increasing oilseed production and reduction in consumption, he said.