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Economic Survey 2015: Government plans to link agricultural import duty with international prices |
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NEW DELHI: The government plans to reform the import policy of agricultural products and link customs duty of a commodity with its international prices.
The Economic Survey for 2014-15, tabled in Parliament on Friday, said the applied tariffs for imports should be linked in a countercyclical manner with international prices so that the landed prices of imported commodities fall within a known range.
It said an increase in tariffs is recommended for agricultural products in response to decline in prices on an ad hoc basis.
"This would protect farmers from adverse impact of steep fall in commodity prices and facilitate long-term investment in agriculture," the survey said.
The import policy for agriculture is often considered as a price support and price stabilisation tool, it said.
A pre-announced import duty structure is expected to bring stability in domestic edible oil prices, leading to increase in production of oil seed and palm, and reduce incidences of prices falling below MSPs of oilseeds requiring procurements by government agencies.
An edible oil industry official said tariff-based import duty structure would help safeguard interest of Indian farmers, as it would protect minimum baseline prices. However, the move may increase retail prices of edible oil, the person said.
Import duty on crude and refined edible oils were raised in December to 7.5% and 15%, respectively, from 2.5% and 10% earlier.
India is the largest importer of edible oils in the world. The country imported around 11.8 million tonnes of edible oils in 12 months ended November 2014, to meet 50% of its domestic requirement.
The Economic Survey said that while the trade policy regime should be stable, it should also be nimble to quickly respond to any change in export duty structure of source countries aimed at pushing value-added products by neutralising India's duty differential between raw material and finished product.
The survey also said there is increasing demand for opening up of the export of pulses, which would incentivise farmers to invest in pulse cultivation, and for a reasonable duty structure to contain excessive import. Currently, export of only kabuli chana and up to 10,000 tonne of organic pulses per annum is allowed.
Pradeep Ghorpade, chief executive officer at India Pulses and Grains Association, said, "We have been demanding opening up of exports of pulses as it will boost production and help farmers get remunerative prices."
India has emerged as a significant exporter of commodities such as cotton, rice, meat, oil meals, pepper and sugar.
As per the World Trade Organisation's Trade Statistics, the shares of India's agricultural exports and imports in world trade in 2013-14 were 2.69% and 1.31%, respectively.
Agricultural exports as a percentage of agricultural GDP have increased to 14.05% in 2013-14 from 9.10% in 2008-09. During the five-year period, agricultural imports as a percentage of agricultural GDP increased to 5.50% from 3.94%.
Source : economictimes.indiatimes.com
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