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PMO instructs commerce min to work on plan to reduce import dependence
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Monday, 15 September, 2014, 08 : 00 AM [IST]
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Ashwani Maindola, New Delhi
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fiogf49gjkf0d The commerce ministry has started working on a strategy after getting a directive from the prime minister’s office (PMO) to reduce the country’s unwarranted dependence on imports.
At the latter’s behest, the former would be devising a policy paper containing a strategy, goal, roadmap and outcome for the same. For this, PMO stated that the ministry should undertake an import appraisal exercise every quarter.
PMO identified nine commodities whose import costs exceed $100 million, and instructed that their import be reduced. These include vegetable oils, pulses, fresh fruit, cashew, sugar, alcoholic beverages, processed items, cocoa products and sesame seeds.
It asked the commerce ministry to prepare a report based on the analyses of import trends over the past three years, whether their domestic demands could be met, and other measures to reduce the import dependence, including imposing higher tariffs and duties.
India imported $7,250.06 million worth of vegetable oils in 2013-14. This year, the bill for vegetable oil imported between April and June has already crossed $2,308.50 million vis-a-vis the previous year’s $1,523.12 million.
According to a report published by the Indian Agricultural Research Institute’s (IARI) Division of Agricultural Economics, in 2012, the country imported nearly half of the annual consumption of 168 million tonne.
Second on the list was pulses, with import bills of $1,828.21 million in 2013-14. In the first three months of the current fiscal year, $513.75 million worth of pulses was already imported, while it was $476.55 million in the corresponding period of the last fiscal year.
According to the Department of Agriculture, there is a gap of around three million tonne in the demand for and supply of the pulses. Last year, the production was 19.27 million tonne, while 3.41 million tonne pulses were imported.
Fresh fruits was third on the list, with $1,273.48 million import bills and till June 2014, fruit worth $434.26 million was already imported.
Acting on the direction, the commerce ministry sought suggestions from such agencies as the Agricultural and Processed Food Products Export Development Authority (APEDA), the Solvent Extraction Association of India (SEA), the Indian Oilseeds Produce and Export Promotion Council (IOPEP), and the Cashew Export Promotion Council of India (CEPCI).
According to SEA, the country’s dependence on vegetable oil imports, which was only three per cent in 1992-93, has increased to over 55 per cent currently.
The main reason for this dismal state of affairs is that the oilseed production has remained almost stagnant, while the demand has been growing much faster, both because of the increase in per capita consumption and population growth.
If indigenous production does not go up significantly, the dependence on imports may even go up over 75 per cent within the next few years.
“The oilseeds production, and the productivity is stagnant at around 28-30 million tonne, and the productivity at 1,000-1,100kg per hectare,” stated B V Mehta, executive director, SEA.
“The government and the industry need to go to the root cause of the problem, and take appropriate policy initiatives to boost the production and productivity in the country to check the rising import,” he added.
Santosh Sarangi, chairman, APEDA, said, “There is a need to increase the production in the country, particularly that of pulses and fresh fruit. Also, the area under cultivation of these commodities should be increased to get the desired output.”
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