Government hikes import duty on edible oil by 5%

NEW DELHI: Government today hiked import duty on crude and refined edible oils by 5 per cent in a bid to protect farmers' interest and provide a level-playing field to domestic oilseed processors.

The Solvent Extractors Association (SEA) said however that the marginal increase in import duty of edible oils was not "enough" to curb cheap imports, and will not benefit farmers and local refiners to a great extent.

According to a notification issued by the Central Board of Excise and Customs (CBEC), customs or import duty on edible oil in all categories has been increased by 5 per cent.

Duty on crude edible oil has been increased from 7.5 per cent to 12.5 per cent and on refined edible oil from 15 per cent to 20 per cent.

The duty hike follows review of the situation by Revenue Secretary Hasmukh Adhia on Wednesday after the ministries of agriculture and food had moved a proposal to raise import duty on edible oils.

Senior Congress leader Ahmed Patel in a letter to the Finance Minister earlier this week had also made a strong pitch for increasing the import duty on edible oils to give a fair deal to oilseed growers.

Meanwhile, SEA Executive Director B V Mehta said: "It is a welcome step but not enough. The current hike will not support farmers to a great extent. The industry demanded substantial hike in duty of crude edible oil to 25 per cent and refined oil to 45 per cent, to support farmers.

"We wanted duty difference between crude and refined edible oils to increase so that value addition takes place in India. With marginal hike in duty, imported refined edible oil will increase and disturb the local refiners," he added.

As per the industry estimates, the country's overall edible imports are likely to increase to 14 million tonnes in the 2014-15 oil year (November to October) from 11.6 million tonnes in the previous year.

Already, 11.56 million tonnes of edible oil has been imported in the November-August period of this year.

About 60 per cent of India's annual edible oil demand of 18-19 million tonnes is met through imports, mostly from Malaysia and Indonesia.