Edible oils industry body SEA on Monday urged the Centre to increase import duty on RBD palmolein from the current 12.5 per cent to 20 per cent to discourage cheaper imports and protect domestic refiners.
In a memorandum submitted to Union Food Secretary Sanjeev Chopra, Solvent Extractors' Association (SEA) President Ajay Jhunjhunwala said the import duty difference between RBD palmolein and Crude Palm Oil (CPO) should be increased to at least 15 per cent.
The low duty difference of 7.5 per cent is a boon for Indonesian and Malaysian refiners. It is cheaper to import RBD palmolein because the taxes on the commodity imposed by Indonesia is lower by USD 60 per tonne when compared to Crude Palm Oil (CPO), he said.
As a result, there has been a sharp increase in the import of RBD palmolein in the last two months. Nearly 4 lakh tonne has been shipped in the country, depriving domestic industry for capacity utilisation, he added.
Stating that the rise in refined palm oils import is affecting the domestic refining industry, the SEA President said the duty difference can be widened "by increasing the import duty on RBD palmolein from current 12.5 per cent to 20 per cent, without any change in crude palm oil duty".
"We feel a 15 per cent duty difference would help reduce palmolein imports and replace the same with CPO imports," he said, adding that overall imports will not be affected and will not cause to inflation.
On the contrary, it will help improve capacity utilisation and employment generation in the country, he added.
SEA also said domestic refiners are heavily suffering from very low capacity utilisation and getting transformed into mere packers and seriously compromising heavy investments made in this sector.
India is dependent on edible oil imports. The imports had risen to 140.3 lakh tonne in 2021-22 (November-October) from 131.3 lakh tonne in the previous year.