Vanaspati cos prefer Nafed for imports
The vanaspati industry has urged the Centre to appoint National Agricultural Cooperative Marketing Federation of India (Nafed), instead of State Trading Corporation (STC), as the canalising agency for importing duty-free vanaspati from Nepal.
By Ratna Ganguli, TNN |
KOLKATA: The vanaspati industry has urged the Centre to appoint National Agricultural Cooperative Marketing Federation of India (Nafed), instead of State Trading Corporation (STC), as the canalising agency for importing duty-free vanaspati from Nepal.
At present, Nafed is acting as canalising agency for importing duty-free vanaspati quota from Sri Lanka. The vanaspati industry has alleged that STC, instead of acting as a canalising agency, is merely working as a dealmaker between vanaspati exporters of Nepal and Indian importers.
“This has led to a situation where STC has no control over distribution of cheap vanaspati within the country,
allowing Nepalese exporters to dump their products to the detriment of Indian vanaspati industry,” said IR Mehra, executive director of Indian Vanaspati Producers’ Association (IVPA).
But, “since Nafed directly imports through tenders, the agency is expected to keep close tab on the flow of imports, according to the requirements of states,” he said, adding “It has been mandated by the government to maintain a price parity with imported and indigenous vanaspati, while booking contracts for its imports.”
Originally, the idea was that STC would canalise the import of duty-free vanaspati from Nepal, with a view to distribute this in different states as per their requirements.
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However, the director general of foreign trade (DGFT) had later permitted it to import the products through its appointed agencies, which are all private trading firms. Under the Indo-Nepal Trade Treaty of 2002, India has allowed import of tariff rate quota (TRQ) vanaspati from Nepal for up to one lakh tonne a year.
For having no import duty on that amount of vanaspati, Nepalese vanaspati costs Rs 4,000 per tonne less than any leading Indian vanaspati brand. Another reason for high prices of Indian vanaspati is a 78.2% customs duty on raw material, crude palm oil (CPO), which is negligible in Nepal.
Against this scenario, the vanaspati industry wants Nafed to take over the responsibility of canalising duty-free vanaspati from Nepal.
In this respect, similar system should be followed by it which is applicable to same type of vanaspati import from Sri Lanka. Under the Free Trade Agreement with Sri Lanka, India has allowed duty-free import of vanaspati from that country up 2.5 lakh tonnes.
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