Expressing concerns over the threats being faced by the domestic oleochemical industry due to large scale import of finished products such as stearic acid, refined glycerine, soap noodles and oleic acid at nil duty from countries in South-East Asia, the Solvent Extractors’ Association of India (SEA) has asked the Government to place them under the restricted items list.

In a memorandum submitted to Piyush Goyal, Union Minister of Commerce and Industry, Consumer Affairs and Food and Public Distribution, the SEA President, Ajay Jhunjhunwala, said oleochemicals are the chemicals derived from vegetable oils and fats.

Stating that large investments and capacity expansion have happened in this sector in India in the last decade, he said India has high domestic consumption as well as potential to grow further.

Existential threat

Domestic oleochemical industry industry is facing severe existential threat due to increasingly large scale import of finished products such as stearic acid and refined glycerine at 5 per cent duty, and soap noodles and oleic acid at nil duty from countries such as Malaysia, Indonesia and Thailand.

Refined palm stearine, which is the raw material to produce these oleochemicals, is allowed to be imported with a basic duty of 12.5 per cent.

He said finished oleochemicals are getting dumped in India at nil or subsidised duty at the cost of domestic oleochemicals industries. Due to this anomalous situation, India’s domestic oleochemicals manufacturers producing the same are getting seriously affected.

Imports up

India’s stearic acid imports increased from 756 tonnes in 2015-16 to 25,873 tonnes during 2023-24 (till November-end), and soap noodles from 3,286 tonnes in 2015-16 to 62,483 tonnes till the end of November 2023-24.

Refined glycerine imports to India increased from 10,764 tonnes in 2015-16 to 48,748 tonnes in 2023-24 (till November-end), and import of oleic acid increased from 31,329 tonnes in 2015-16 to 61,555 tonnes till the end of November 2023-24.

Jhunjhunwala said many countries have protected their oleochemical industry by putting restriction or higher duty on finished products from Indonesia and Malaysia. Recently European Union has safeguarded its oleochemical industries by putting anti-dumping duty on Indonesian products, he said.

Jhunjhunwala said imports of stearic acid, soap noodles, oleic acid and refined glycerine should be placed under ‘restricted’ items list. He said import duty on these products should be with additional duty of 25 per cent over the imported raw material such as refined palm stearin.

He urged the Government to allow duty-free imports of all required raw materials to oleochemical players having splitting, distillation and hydrogenation plants.

These actions will help the domestic oleochemical industries to thrive and grow, and help realise the Prime Minister’s vision of Make in India, he added.

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