The government has suspended all 39 licences issued for import of about 4.55 lakh tonne of refined palm oils, a move which industry body SEA on Tuesday hailed saying this will check illegal cheap imports and protect domestic refinery industry.
To check illegal inbound shipments, refined palm oil was put under the restrictive list of import on January 8 this year and companies were required to take licence for import from the Directorate General of Foreign Trade (DGFT) under the aegis of the Commerce Ministry.
"DGFT has issued 39 licences to different firms... The Department of Commerce has reviewed its decision and has decided to suspend all these licences," the DGFT said in an office memorandum dated May 11.
The 39 licences were issued for import of 4,55,301 tonne of refined palm oils and much of the quantity was to be shipped from Nepal which does not even produce palm oils.
Many of the licences were issued to companies located in eastern India, especially West Bengal and Bihar.
Of the total quantity for which licences were issued, about 2.93 lakh tonne of refined palm oils were to be shipped from Nepal and 12,000 tonnes from Bangladesh, while 1.5 lakh tonne from Indonesia.
In the official memorandum, the Directorate also said that it is possible that some imports might have taken place against these licences.
"But from now on, no clearance is to be allowed against these licences," it said and added necessary suspension orders are being issued by regional authorities of DGFT.
Lauding the government's decision, Mumbai-based Solvent Extractors Association of India (SEA) Executive Director B V Mehta said Indonesia and Malaysia are major suppliers of palm oils. But the shipments are routed through Nepal and Bangladesh illegally at nil import duty.
"The government has started enquiring if rules of origin of the product were flouted. It is a major revenue loss to the government if imports are allowed through such routes," he told PTI, adding that SEA had made several representations to the Commerce Ministry to check such imports.
In January, after the commodity was put under the restrictive list of import, Mehta said the licences were issued for import of about 11 lakh tonne. Of this, licences for import of 2 lakh tonne refined palm oil had reached to respective companies.
"When SEA had flagged the concern to the Commerce Ministry, it had immediately directed officials to stop the import of 9 lakh tonne. However, a circular was issued later for issuance of fresh licence....Then the industry again made a representation on this issue," he said.
The import of refined palm oils has been rising in the last few months, affecting the domestic refiners and local jobs, he noted.
According to SEA, suspension of licences will not affect the availability in the country as there is enough supply of edible oils . In fact, against the monthly edible oil requirement of 19-20 lakh tonne, the demand has come down by 25 per cent due to closure of hotels and restaurants because of COVID-19 lockdown.