Govt removes import duty on dairy products

Concerned over the rising prices of milk, the government has removed the duty on skimmed milk powder (SMP) and other dairy products.

In a notification issued by the revenue department, the dairy industry can import up to 30,000 tonne SMP at zero duty in a financial year.

Earlier, the industry was allowed to import only up to 10,000 tonne SMP at 5 per cent duty under TRQ (tariff rate quota).

Similarly, the government has allowed duty-free import of other milk products including white butter, butter oil and anhydrous milk fat up to 15,000 tonne in a fiscal.

According to whole-sale price based inflation, milk prices have shot up by 14.73 per cent in the last one year.

Reacting to the decision, Indian Diary Association President N R Bhasin said "the decision to reduce duty on SMP will only have psychological impact".

He further said it would be difficult to import SMP as there is hardly any price difference between the domestic and landed cost of imported products.

Minster of state for agriculture KV Thomas had recently told the Rajya Sabha that "the sale price of milk has been increased by Rs 1-7 per litre in the country from January 2009".

Milk production has gone up to 108.5 million tonne in 2008-09 against 80.6 million tonne in 2000-01. The demand for milk has been projected at 166 million tonne by 2020.