02/09/05 NEW DELHI, (Bernama) -- Increasing imports of hydrogenated edibleoil from Malaysia and an "inverted" duty structure, is posing a potentialthreat to the survival of Vanaspati (hydrogenated vegetable oil) sector inIndia.

This has been stated in a representation to the Finance Ministry by thePHD Chambers of Commerce and Industry, the third largest chamber in India.

The representation further said that unfair competition from the duty-freeimport of Vanaspati from Nepal and Sri Lanka, under the respectiveFTA/Trade Treaty, had made it difficult for the sector to maintain itsexisting operations.

Raising concerns over the "inverted" duty structure regarding vanaspati,the chamber noted that the sector had to pay customs duty of 80 percent onthe import of crude palm oil, which is the basic raw material for themanufacture of Vanaspati.

"On the other hand import of Vanaspati (possibly it refers to refined palmoil) from Malaysia attracts customs duty of only 30 percent, thus leadingto inflow of cheaper Vanaspati, to the detriment of the Indian Vanaspatiindustry," the representation said.

It further pointed out that due to these anomalies Indian Vanaspati wascostlier by Rs.8,812 (US$200) a tonne as compared to Malaysian Vanaspati.

Considering this, PHDCCI has urged the government to remove the anomaly byeither reducing the customs duty on crude palm oil or by increasing theeffective rate of customs duty on the import of Vanaspati from the present30 percent to 90 percent.

-- BERNAMA