Point of view: Indian attitude towards local Vanaspati industry “insensitive” - Industry Spokesman
 

The Indian Government has taken steps to freeze the import duty on crude edible oil at zero per cent and refined oils at 7.50 per cent enabling Sri Lanka Vanaspati products to enter the Indian market, its sources said.

India has shown an insensitive attitude towards Sri Lankan Vanaspati industry, which is manufacturing high quality products in Sri Lanka in comparison to low quality goods sold in India, active member of the Vanaspathi Manufactures Association of Sri Lanka Abhishek Rastogi said.

Since the rising prices of the edible oils have forced the Indian Government to take effective measures to control the Inflation in the best of interests of the Indian public at large.

The Indian government has taken bold steps by freezing the import duty on Crude Edible Oils at 0 per cent and Refined Oils at 7.50 per cent (Effective Duty on Refined Palm Oil is 2.80 per cent due to freezing of tariff on US$484).

Despite the surge in prices, the soaring domestic demand in India has forced them to import refined oils in huge quantities from Malaysia and Indonesia to meet the local demand. As analysed from India’s Import Statistics, India is short of refining capacity to cater to the actual domestic demand in India.

“As a result of the action taken by the Indian Government, the above freezing of import duties at 7.5 per cent on Refined Oils (Effective Duty at 2.80 per cent) has jeopardised the Sri Lankan Vanaspathi Industry to virtual permanent closure due to non-parity in exports to India.

As the effective duty is 2.80 per cent and considering the shortage of refining capacity in India, we strongly feel that the available surplus capacity in Sri Lanka may be used to bridge the gap to cater to the local demand & henceforth will enable to maintain the bilateral interest and spirit under ISFTA.

The Sri Lankan Product’s entry in Indian Market will force the Indian Players to reduce their profit margins and thus will help to reduce the domestic prices in India and will contribute to reduce inflation in macro environment”.

“We have requested the Indian Government via the Sri Lankan Government to allow the export of refined oils with HS Code change at 6 digit level under the permitted value addition of 20 per cent under the same Quota of 250,000 MTS from Sri Lanka for the survival of our Industry.

As a result of the approval, the Sri Lankan Industry would not be in a position to make profits, but will enable them to keep their plants in operation and can help us to recover the overheads to an extent,” Abhisek said.

As the High Profile Indian Delegation will be in Sri Lanka soon comprising Senior Members of Indian Government, we solicit your intervention by raising our demand with the Indian Delegation effectively as the Sri Lanka Industry has been contributing to a great extent by earning foreign exchange and by providing direct and indirect employment to people of Sri Lanka.

The points to be questioned before the Indian Delegation are:

1. What is the purpose of signing a broader bilateral agreement called CEPA when the Interests of existing Industry under ISFTA have been completely ignored? Since the Indo-Sri Lanka FTA has been signed, the Indian businessmen have made huge investments in Sri Lanka like Vanaspati, Marble and Copper.

After a short period, on the complaint of the Indian Industry, the Indian Govt took a drastic step to either ban the products or imposed a quota on exports to India. Further, apart from that above said Industry, they have also restricted the imports of apparel from Sri Lanka to 7.5 million pieces.

2. As lot of imports is coming from India to Sri Lanka without any restriction, why the Indian Government is not maintaining the spirit of FTA by either banning the product or imposing a quota on the same?

3. The Trade Deficit between Sri Lanka and India is increasing day-by-day with no virtual export from Sri Lanka to India. So, India should be morally responsible towards the neighbour by allowing maximum exports to India from Sri Lanka considering the huge market in India which no Industry in Sri Lanka can feed the demand in India.

India has shown an insensitive attitude towards our Industry which is making high quality products in Sri Lanka in comparison to low quality goods sold in India. Despite maintaining high quality by adding vitamins and sesame oil, the Sri Lankan product has faced acute problems in customs clearance in Indian ports.

So, those businessmen who have invested huge monies in an Industry coming under ISFTA, have lost confidence in the acts of Indian Government and have virtually shaken the confidence of Sri Lankan businessmen.

So, we strongly feel that signing another agreement like CEPA will have no effect on Indo-Sri Lanka Trade and first the disputes under FTA should be resolved in the correct light. (HHS)