The commerce ministry of India has recommended a 5 percent safeguard duty on imports of a particular variety of palm oil from Malaysia for 180 days, a move aimed at protecting the interest of domestic players. The ministry's investigation arm DGTR has recommended the duty after conducting a probe into an alleged jump in imports of "refined bleached deodorized palmolein and refined bleached deodorized palm oil" from Malaysia, following a complaint from Solvent Extractors' Association of India (SEA).

"The director-general recommends the increase in the rate of customs duty on imports of subject goods originating in Malaysia by 5 percent, for a period of 180 days which is considered appropriate to safeguard the interest of domestic industry," the Directorate General of Trade Remedies (DGTR) said in a notification.

It said after examining the application filed by the petitioner, it has prima facie found sufficient evidence that the palm oil imports have increased significantly causing serious injury to domestic producers.

The investigation is being carried out under the India-Malaysia Comprehensive Economic Cooperation Agreement (Bilateral Safeguard Measures) Rules, 2017. The agreement is a kind of free trade pact under which both countries have reduced customs duties on several goods traded between them.

The application for the probe was filed by SEA on behalf of domestic producers. It had alleged that the increase in imports of the oil from Malaysia is causing serious injury or there is a threat of serious injury to domestic producers.

The petitioner had claimed a significant decline in production, sales and capacity utilization for the product. They have also stated that the market share of the Indian industry has declined whereas the market share of imports has increased. The period of investigation was January-June 2019. It also considered the import data of 2016-19.

The product is commonly used to formulate trans-free fats such as margarine, shortening and vegetable ghee. The notification said imports of the product have increased significantly in the period of investigation (POI) in absolute terms.

"There is a sharp and significant increase in imports of the product during the POI. Imports from Malaysia increased from 6,26,362 MT in 2016-17 to 25,96,225 MT in Jan-June, 2019 (on an annualized basis) thus showing an increase of 314 percent. Imports from other countries declined from 23,15,292 MT in 2016-17 to 7,25,210 MT in Jan-June, 2019 (on an annualized basis)," it added.

Source: chemarc