The national exchequer is losing as much as ₹1,200 crore annually because of zero duty import of refined edible oils from Nepal and Bangladesh besides hurting local manufacturers, apex association of edible oil manufacturers and trade, Central Organisation for Oil Industry and Trade (COOIT), said in a statement on Tuesday.

In a letter written to different ministries – Ministry of Agriculture & Farmers Welfare, Ministry of Consumer Affairs, Ministry of Finance Ministry, Ministry of Commerce and Directorate General of Foreign Trade (DGFT) - COOIT said that considerable quantity of refined oils is being imported into India through road in tins, jars, bottles and pouches on zero duty from SAARC countries particularly from Nepal and Bangladesh.

Imports from these country attract zero duty as per the custom notification issued in November 2011, it said. Currently, an estimated 4 lakh tonnes of edible oils enter India through this route, COOIT alleged.

“Nepal and Bangladesh are not the manufacturers of soyabean and/or palm oil. They are importing palm oil from Malaysia and Indonesia and soyabean oil from Brazil and Argentina. Hence, both these countries cannot be considered as original manufacturer for palm and soya oil and therefore, import of refined oil on zero duty basis from these countries should immediately be stopped,” COOIT said.

According to COOIT, domestic Indian refineries are currently importing Crude Palm Oil after payment of ₹32 per kg as import duty and ₹41 per kg on Soya Crude Oil. At the same time, Bangladesh and Nepal import it from Malaysia, Indonesia, Brazil and Argentina, and subsequently export to India on zero duty. “As a result, our refineries in North East and North India are suffering as they are unable to sell their products against the imported packed goods at zero duty,” the trade body said.

COOIT said it had raised the matter with the government departments in the past as well. It is to be noted that the Central government on November 9, 2011 exempted several goods including edible oils from the whole customs duty provided that the importer proves to the satisfaction that the goods being imported are of the origin of the country who are signatories of South Asian Free Trade Area (SAFTA), 2006.

COOIT has also requested the government that in case it cannot or do not wish to discontinue the zero import duty from these nations, it should import refined oils from these countries through PSUs and distribute through PDS to BPL Card Holders at cheaper rates as the duty components will not be there and the government will not have additional financial burden up to that extent. It will be a win-win for all the stakeholders.