Edible Oil Import Concerns: SEA Urges PM to Regulate Nepal Imports

New Delhi, Feb 10 (PTI) Edible oils industry body SEA has written to Prime Minister Narendra Modi urging him to take steps to regulate the inflow of cheaper cooking oils from Nepal and other SAARC nations as it is affecting the domestic processors and oilseeds farmers.

In its letter to the Prime Minister and other senior cabinet ministers dated February 6, the Solvent Extractors' Association of India (SEA) noted that import of edible oils at zero duty under SAFTA (South Asian Free Trade Area) agreement is hurting India's interest.

"We would like to draw your kind attention to massive influx of refined soyabean oil and palm oil once again from Nepal to India flouting rules of origins, seriously hurting domestic refiners, farmers and loss of revenue to the government.

"The import of edible oil at nil duty under the SAFTA agreement from Nepal is creating havoc not only in Northern and Eastern India but now has also reached Southern India and Central India," SEA President Sanjeev Asthana said in the letter.

In view of duty advantage under SAFTA agreement, SEA said that as per market sources, at least 50,000 to 60,000 tonnes of refined oil per month will flow from Nepal to India.

The association has suggested various measures to the government to prevent injury to the Indian edible oil economy and farmers.

Firstly, SEA said the government should impose a Minimum Import Price (MIP) for the edible oils coming from SAFTA countries. The MIP (minimum import price) should not be less than the price of oil extracted from the oilseeds in India as per MSP (minimum support price) for oilseeds in India.

The country of origin rules must be followed strictly, it said, adding that value addition criteria should be followed between the price of the import in SAFTA countries and re-exports to India.

"The SAFTA agreement should be modified to ensure only part of the installed capacity in the member country and should be linked to the domestic demand for duty-free imports. This is essential to prevent SAFTA from becoming a dumping route into India by avoiding customs duty payment," SEA said.

It also recommended canalising the import through some public sector undertakings (PSUs), like NAFED, to manage and regulate flow of imports from Nepal to India.

The association suggested the government to fix the quota for import of refined oils from Nepal.

"Sir, what started as a trickle in the beginning has now assumed alarming proportions and is not only threatening the very survival of vegetable oil refining industry in Eastern and Northern India but also resulting in huge revenue loss to the Government of India.

"Apart from these losses it is harming the interest of oilseed farmers as it results in distorting our markets and the very purpose of keeping high import duties on edible oils is getting negated," SEA said.