Local edible oil exporters in a tight spot

FE Today Logo January 23, 2020

India has imposed restrictions on edible oil import in its market, which has started taking toll on Bangladesh’s exports to the neighbouring country, officials say.

While the control is not country-specific, it goes against the spirit of the South Asian Free Trade Area, or Safta, accord, with the effect falling on Bangladesh, the exporters said.

Officials said the Directorate General of Foreign Trade, DGFT, of India on January 8 published a notification amending its import policy, which shifted products like refined bleached deodorised palm oil and palmolein from “free” category to the “restricted” one.

Due to the amendment, they said, every consignment of the edible oil has to enter the country obtaining prior approval from the DGFT, which is largely time-consuming and a discouraging.

Bangladeshi manufacturers mainly export edible oil to the north-eastern states of India.

Exporters said no part of the Bangladesh border with Indian north-eastern state is in DGFT’s land port list for applying the import permit. Thus, Indian buyers cannot obtain import permission through the north-eastern land ports.

SG Oil Refiners Ltd, a 100 per cent export-oriented refinery based in the Mongla Export Processing Zones, in a recent letter to the ministry of commerce, said its export is seriously hampered due to the restrictions imposed by India. “As a result, we are facing serious financial losses and are compelled to shut down our factory,” company chairman Sarwar J Talukder wrote in the letter.

He also wrote that Bangladesh being a signatory to the Safta deal is supposed to get protection from such restrictions.

The Article 17 of Safta — maintenance of the value of concessions— stated that “Any of the concessions agreed upon under this agreement shall not be diminished or nullified, by the application of any measures restricting trade by the contracting states, except under the provisions of other articles of this agreement”.

In reference to the above article of Safta, the withdrawal of concession as imposed through the notification issued by the government of India “is against the spirit of SAFTA,” Mr Talukder added.

A senior commerce ministry official told the FE on Monday since Bangladesh’s edible oil export to India is on the rise, the neighbouring country trying to create obstacles in various ways.

During fiscal year 2018-19 Bangladesh exported edible oil worth over $100 million.

He said during the bilateral commerce secretary-level meeting in New Delhi late last week, Bangladesh side raised the issue seeking the withdrawal of the restrictions on Dhaka.

The Indian officials, he noted, assured Bangladeshi counterparts of revisiting the decision after discussion with government’s high ups.

“We will send a formal letter this week to India seeking an immediate action for the removal of the restriction,” he added.



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