Nafed may lose monopoly over Lankan vanaspati import

India may expand the list of state trading entities which can import vanaspati from Sri Lanka. It is also considering allowing private traders to import the commodity.

At present, these imports can be routed only through the National Agricultural Cooperative Marketing Federation (Nafed).

The relaxation comes on the back of Sri Lanka agreeing to India's proposal to limit its vanaspati imports, including bakery shortening and margarine, to 2.5 lakh mt.

Officials said the proposals would be finalised only after consultations with the Sri Lankan government. A high-level team is scheduled to hold discussions with their Lankan counterparts next week.

The proposal to allow other state trading enterprises to import vanaspati is being considered in the wake of concerns raised by Lankan vanaspati manufacturers over the lack of clarity on norms outlined by Nafed for distribution and the quantity of imported vanaspati.

Officials said there was another proposal to allow private traders to import vanaspati by applying to the Directorate General of Foreign Trade. "Private traders who have legitimate purchase agreements with Lankan vanaspati manufacturers could be allowed to import," an official said.

The government is also mulling restricting imports of pepper at certain ports. "Ports like Tuticorin or Cochin could be restricted on pepper imports in order to protect the domestic pepper industry's interests," an official said.

Sri Lanka has agreed to consider India's suggestion for a tariff rate quota (TRQ) of 2,500 mt for pepper imports from the island nation. The TRQ for pepper will be applicable to imports outside the advance licence scheme. Such imports have a re-export clause.

Similarly, the island country has agreed to a TRQ of 500 mt for desiccated coconut at a concessional duty of 30 per cent. The normal import duty on the item is 60 per cent.

Under a TRQ, imports from another country are allowed usually at a reduced import duty up to a fixed limit in a year.