But with the latest revision, announced on January 2, there is a different story to tell. It is the story of how the Indian Government has continually tried to placate Malaysia and provided a palliative to the Malaysian Government by revising tariff values in such a way that imports from Malaysia are encouraged.

The genesis of this may be traced to ongoing pressure from the Malaysian Government on India since 2003 to reduce the high rate of Customs duty on palm oil and the visit of the Prime Minister, Dr Manmohan Singh, to Kuala Lumpur last month where he was reported to have conceded the anomaly of Customs duty differential between soyabean oil and palm oil.

Malaysia has been upset on two counts. One is that soyabean oil bears a lower rate of duty (45 per cent) in India, as a result of which soya oil's share in the Indian market has been expanding.

The second is that India's very large palm oil imports (30-35 lakh tonnes a year) comprise largely crude palm oil, and that too mainly from Indonesia, as a result of which Malaysia's share of the burgeoning Indian market is not growing.

Malaysia favours export of refined oil, rather than crude oil, while Indian refineries seek crude oil for refining locally. The duty differential between crude palm oil (80 per cent) and refined palmolein (90 per cent) also favours the former.

So, how can India extend a favour to Malaysia? Clearly, at this point in time, it would be both politically and commercially inexpedient to reduce the duty on palm oil as the domestic market is already depressed.

The only way for India to show a gesture towards Malaysia was to tinker with the tariff values of palm group of oils. So, in the latest revision, the differential between crude palm oil ($417 a tonne) and refined palmolein ($421 a tonne) is a negligible $4 a tonne.

In the physical market, the price differential between crude palm oil and refined palmolein has always been $25-30 a tonne, which is accounted for by refining cost.

The current tariff value structure, far from reflecting market conditions and physical market price differential (between crude and refined palm), is clearly intended to favour Malaysia's refined palmolein.

A look at tariff value revisions over the last few months clearly reveals that it is by design that the Finance Ministry has reduced the tariff value difference between crude palm oil (CPO) and refined palmolein (RPN).

The difference in tariff value, which was as wide as $30 a tonne in September (CPO $397 and RPN $427) was steadily brought down over successive notifications to $4. (See Table)What the Indian Government was unwilling to do directly (that is reduce the rate of basic Customs duty), it has done indirectly. In effect, instead reducing the rate of Customs duty on refined palmolein from 90 per cent, it has indirectly reduced the duty burden on refined palmolein in order to encourage import from Malaysia.

At current tariff value differentials, the effective rate of duty on refined palmolein works out to 85-86 per cent instead of 90 per cent.

Increased inflow of refined palmolein (finished product) rather than crude palm oil (raw material for refineries and vanaspati producers) would obviously hurt domestic processing industry interests.

It is, of course, an entirely different story that the refining industry here has built processing capacities far in excess of the country's needs and has been banking on Government support in the form of continued differential in Customs duty between crude and refined oils.

No tears need be shed for refiners because they took a commercial decision to invest in facilities, based purely on expectation of continuing imports and duty differences.

Indeed, it may be possible to argue that their heavy dependence on imports may be a contributory factor for poor participation of the private sector in oilseeds production programmes and augmentation of domestic resources.

They will have to accept changes in fiscal imposts or import policy.

But the Government has a greater responsibility. It cannot effect changes in fiscal imposts capriciously. Government notifications are supposed to be in public interest that is demonstrable. In the instant case, lack of transparency in decision-making is palpable.

This, obviously, is the untold story of palm oil tariff value revision. It could be a fit case for aggrieved players to approach a court of law and demand greater transparency in fixing tariff values.