Import of Edible Oil from SAARC with Zero Duty

In the backdrop of the ongoing agrarian crisis in Maharashtra, Chief Minister (CM) Devendra Fadnavis has requested Prime Minister (PM) Narendra Modi to allow import of edible oil from countries belonging to the South Asian Association for Regional Cooperation (SAARC) to India with zero duty only if it is produced there in the backdrop of the ongoing agrarian crisis in Maharashtra.

In a letter sent on August 4, Fadnavis pointed out that "certain disadvantages" had been noticed due to the decision of making import duty free from SAARC countries. "Edible oil imported from Malaysia, Argentina is being routed through Srilanka, Nepal, Bangladesh so as to attract zero import duty, thus depriving the advantage to the farmers from increased MSP," states the letter.

Fadnavis confirmed that he did make such a request to the PM. Maharashtra is a major producer of oilseeds including soybean (a staple in rain-fed and backward regions of Vidarbha and Marathwada), groundnut and sunflower besides pulses like tur, urad and gram. The Centre hiked import duty (the highest in a decade) on edible oils this June ahead of the Kharif season to protect local farmers.

Fadnavis reasoned the absence of this clause would nullify the benefit of the minimum support price (MSP) to farmers promised by the Centre.

This year with the hike in MSP and slash in imports, soybean farmers are getting ^3,600 to Rs.3,700 per quintal, more than the MSP Rs.3,300. If oil imports from other countries are being routed through SAARC countries, there will be a loss of around Rs.400 per quintal," said BJP MP and chairman of the Maharashtra Commission of Agriculture Costs and Prices, Pasha Patel.

 "What's the use of lobbying so hard for the hike in import duty if some countries are using a loophole to cheat our farmers?" he said. Patel has been playing a role in lobbying with the government to hike the import prices, working with the industry and farmers' groups.