Edible oil industry body The Solvent Extractors’ Association of India has sent a memorandum to union commerce minister Piyush Goyal seeking a raise in import duty difference between crude palm oil and its refined variant.

Raising the duty difference to 15 per cent from the current 7.5 per cent will provide a level playing field to domestic edible oil refiners, the association said in the memorandum to the minister. “We would like to bring to your kind notice the plight of the Indian Palm Oil Refining industry which has the potential of seriously impacting the health of this sector which can have long-term ramifications,” the memorandum which was sent earlier this week read.

India imports large quantities of palm oil from Indonesia and Malaysia.

Traditionally, crude palm oil is imported by Indian refiners and massive investments have been made in port-based palm refineries to cater to the ever-increasing demand for edible oil in the country. Importing crude palm oil helps in value addition within the country apart from generating employment, it said.

The memorandum cited how the imports of the refined variant of palm oil during the just concluded oil year (September-October) have skyrocketed and increased by 168 per cent.

“Needless to say this import of finished goods is contrary to our national interests and is seriously affecting the capacity utilisation of our palm refining industry,” it said.

“The main reason for rising in Palmolein imports is the encouragement given by exporting countries (Malaysia and Indonesia) to their industry. They have kept high export duties on crude palm and low export duties on palmolein (finished product). The import duty difference of 7.5 per cent levied by India between CPO and palmolein is insufficient to block the imports of palmolein,” it explained.

In conclusion, the association said it feels a 15 per cent duty difference would help reduce palmolein imports and replace the same with crude palm oil imports.

“Overall imports into the country would not be affected and it will have no impact on edible oil inflation. On the contrary, it will help improve capacity utilisation and employment generation in our country.”

For the record, India is the world’s second-largest consumer and number one vegetable oil importer, and it meets 60 per cent of its need through imports.