04/02/2013 (Bernama) - The edible oil industry of India has urged the government to increase the import duty on refined, bleached and deodorised (RBD) palmolein to 20 per cent to protect the domestic refining industry.

The government had recently imposed a 2.5 per cent duty (from zero) on crude palm oil (CPO) to safeguard the oil seed farmers, which reduced the import duty between CPO and refined oil to five per cent, from 7.5 per cent previously.

"The industry is very much concerned about the consequent reduction in the difference of import duty between crude palm oil and refined palmolein to five per cent as against the previously existing duty difference of 7.5 per cent," The Solvent Extractors' Association of India (SEA)'s president Vijay Data said in a statement Monday.

He opined that the government should have increased concurrently, the duty on refined oils also, thereby achieving the twin objective of protecting both the oil seed farmers and the refining industries interest.

Reduction in the duty differential between refined palmolein and CPO would once again lead to large scale imports of refined palmolein thereby resulting in further underutilisation of capacity of the Indian refining industry, he said.

It was disappointing that instead of taking cognisance of the industry's request of maintaining 10 per cent duty differential, the government on the contrary had actually reduced the differential duty to five per cent, he said.

"We once again make a fervent request to the government to review the duty structure in the interest of the farmers and the domestic industry by maintaining a higher rate of duty on CPO and correspondingly also maintaining a minimum duty differential of 7.5 per cent and preferably 10 per cent, between CPO and palmolein," said Data.

In the long run, the association also wants the Indian government to impose a 10 per cent duty on CPO.

India is the largest importer of edible oils.