Olive oil association asks for duty cuts

The Finance Minister may or may not heed this one but the Indian Olive Association, a new association of olive and olive oil producers, distributors, importers, users and consumers in the country, closely associated with the International Olive Council, Madrid, a UNDP-promoted body, is clamouring to be heard.

The new association was formally launched in New Delhi yesterday and has an agenda of promoting and safeguarding the interests of the olive oil industry in India apart from representing the industry before the government and obtaining the removal of grievances.

With the consumption of olive oil on a rise in the country, there is case now for a cut in import duties on this, and this is a problem that the new association has taken up, according to a press release issued by it. Olive oil is taxed at above 40 per cent in customs for import of retail packs.

The association has now urged the government to reduce this in the Budget, keeping in mind the health aspects of the product and the urgency of "introducing heart-healthy products to tackle the national cardiovascular disease emergency."

Currently, the edible olive oil industry in India is growing at an impressive 90 per cent and is projected to grow at 150 per cent by 2010.

In 2007-08, it is estimated at 2,300 tonnes, of which 1,400 tonnes is for edible use and 900 for non-edible and industrial use. The edible segment grew at 60 per cent over last year (the total, last year was 1,500 tonnes; 750 tonnes for edible and 750 tonnes for non-edible).

According to VN Dalmia, president of the association, an analysis showed that the target audience for olive oil was the 35 million affluent, health conscious Indians of the upper and upper middle classes.

"Assuming that olive oil for edible purposes, consumed by both institutions and individual consumers in 2006-07 was 750 tonnes or 7,50,000 litres and that the average household consumption of olive oil in each household was 1 litre per month or 12 litres per annum, olive oil was used last year by 62,500 households or 3,43,750 persons."

The rates of import duty levied on olive oil in India are 45 per cent on virgin olive oil and 40 per cent each on refined olive oil and olive pomace oil.

In comparision, non-olive oil producing countries (India is a non-producer) like Taiwan, South Korea and China levy lower duties between 8 to 10 per cent.