India may export 5 lakh tonne oilmeals to China post duty cut

India is likely to export 4-5 lakh tonne of soymeal and rapeseed meal this year following China's decision today to cut import tariffs on soybean and some other goods from India, industry body Solvent Extractors Association of India (SEA) said.

China's cabinet has announced it will reduce tariffs on soybean imported from India, South Korea, Bangladesh, Laos, and Sri Lanka from the current three per cent to zero amidst a looming trade war with the US.

The tariff spat between China and the US followed pressure by US President Donald Trump to cut down USD 375 billion deficit in the bilateral trade. The US is a major supplier of soybeans to China.

"Tariff is not an issue for us. We have to see the details of China's take on its quarantine regulations on oilmeals, which needs to be sorted first. I expect there will be some changes or it might be waived off and in that case the exports is likely to go up to 4-5 lakh tonnes, 2-3 lakh tonne soymeal and 2-3 lakh tonne rapeseed meal," Mumbai-based trade body SEA executive director B V Mehta told PTI here.

Before 2012, India exported four lakh tonne of oilmeals (1 lakh tonne soymeal and 3 lakh tonne rapeseed meal) to China worth about Rs 600-700 crore, he said.

In 2012, exports stopped as China had banned oilmeals import from India over quarantine issue, he added. India also presents a logistic advantage as the oilmeals can reach China in 5-6 days.

Meanwhile, the China's State Council said that all imported products from India, South Korea, Bangladesh, Laos, and Sri Lanka will adapt a tariff rate of the Second Amendment of The Asia-Pacific Trade Agreement.

For its part, India has been pressuring China to open up more for Indian products, specially IT and Pharmaceutical, to reduce USD 51 billion in over USD 84 billion trade.

During the India-China strategic dialogue held here in April, Vice Chairman of NITIAayog (National Institution for Transforming India) RajivKumarhad pitched for export of soybean and sugar to China from India.

After the Wuhan informal summit between Prime Minister Narendra Modi and Chinese President Xi Jinping, both the countries are holding talks to step up Indian exports of agricultural products like rice and sugar as well as pharmaceutical, specially the cancer curing drugs to China.