India urges China to remove import duty on oilseeds

The Dollar Business Bureau | @TheDollarBiz The Indian government has urged China to reduce duty on oilseed imports from India under provisions of the Asia-Pacific Trade Agreement (APTA) to help boost exports from India and reduce its trade deficit with China. Despite fluctuations due to weather conditions (over 60 % of production is dependent on rains), India’s oilseed production and exports have increased in the last few years. It is estimated that oilseed production reached a record high of around 328.77 lakh tonnes in FY2013-14. According to the Indian Oilseeds and Produce Export Promotion Council (IOPEPC), total oilseed exports by India surged to around 10 lakh tonnes worth around Rs.7,992 crore in FY2013-14, which is up about 66% and 160% in tonnage and value respectively, up from around 6 lakh tonnes worth around Rs.3,080 crore of exports recorded in FY2009-10. While groundnuts accounted for around 60% of India’s total oilseed exports in FY2013-14, sesame was the top foreign exchange earner in this sector. In FY2013-14, the share of sesame seeds (of around 257,440 tonnes) stood at around 30% by volume but about 50% of earnings from total oilseed exports by India.

Kishore Tanna, Chairman, Indian Oilseeds And Produce Export Promotion Council (IOPEPC)

However, there is scope for further growth in both volume and value, particularly in markets such as China which has reduced its oilseed purchases from India in the recent years. According to IOPEC, China imported around 3,832 tonnes of sesame oilseeds in FY2013-14 (about 1.5% of total sesame oilseed exports by India last year) which is down about 66% from around 11,389 tonnes recorded in FY2011-12. The decline in groundnuts imports from India is steeper. In FY2013-14, China imported around 2,687 tonnes of groundnuts from India which is down almost 93% from 38,340 tonnes in FY2011-12. This is partly due to high import duties on oilseed imports from India. At present, China imposes duty rates of 10% on sesame seed and 15% on groundnuts imports from India, while some countries in Africa have a nil import duty. Recently, a delegation led by Nirmala Sitharaman, Commerce Minister, India, was in China and urged the Chinese government to reduce import duty on oilseed imports from India. Kishore Tanna, Chairman, IOPEPC, who was part of the Joint Economic Group (JEG) delegation to China told The Dollar Business, “The Council has requested Chinese authorities to bring down Chinese import duty on sesame seed and groundnut to zero. We have suggested that the import tariff for oilseeds can be reduced significantly under the Asia-Pacific Trade Agreement (APTA) and are hopeful of an early resolution of the matter.” The IOPEC is organising an Annual Trade Meet in Jaipur, India, beginning this week to help improve India’s oilseeds exports.  

This article was published on October 28, 2014.