Govt designates NAFED to import vanaspati under Indo-Sri Lanka FTA

New Delhi, Jun 4: The Government has designated the National Agricultural Cooperative Marketing Federation (NAFED) to regulate duty-free imports of vanaspati, or hydrogenated vegetable oil, from Sri Lanka in the wake of protests by the trade that low prices were hitting the domestic industry.

The edible oil industry has been knocking the doors of the government to restrict imports as low prices were affecting the indigenous players.

According to a notification issued by the Directorate General of Foreign Trade (DGFT), only the NAFED will be able to import vanaspati at zero duty under the Indo-Sri Lanka Free Trade Agreement.

The DGFT has issued Public Notice dated June 2, 2006, whereby import of vanaspati including bakery shortening and margarine shall be channelized through National Agricultural Cooperative Marketing Federation of India Ltd.

India's annual vanaspati imports from Lanka are in the range of 250,000-300,000 tonnes for use as a cooking medium in households and bakeries.

''Imported vanaspati was being sold at Rs 100-175 per 15 kg lower than domestically produced vanaspati,'' Executive Director of India's Solvent Extractors' Association (SEA) said, adding, several vanaspati units had been shut because of cheap imports because of which domestic output had stagnated at 1.3 million tonnes.

In February, the government had raised the import duty on vanaspati to 80 per cent from 30 per cent to discourage imports from countries like Malaysia.

After the hike in import duty the inflow of vanaspati has stopped from Malayasia, an SEA release here said.

UNI