Niranjan Reddy urges Centre to reduce import tax on oil palm seeds

Agriculture Minister S Niranjan Reddy urged Union Finance Minister Nirmala Sitharaman to consider the imported Oil Palm seed sprouts germinated seeds under the fruit seeds (ITC HS 12099910) category rather than the new palm nuts (ITC HS 12071010) category.

He said the move would reduce the tax burden on farmers which is currently at 30 per cent and promote Oil Palm cultivation.

On Tuesday, Niranjan Reddy wrote a letter to the Union Finance Minister emphasising the need to promote the cultivation of oil crops and achieve self-sustenance in edible oil production, considering the growing demand for edible oil in the country. He explained that the Telangana government took many initiatives for the welfare of the farming community in the State including improving irrigation potential, uninterrupted and free power supply, and financial incentive of Rs 10,000 per acre per year under Rythu Bandhu scheme among others.

He said that the State government had decided to promote Oil Palm cultivation on a large scale in about 20 lakh hectares over a period of three years from 2022-23 onwards in a mission mode. About three lakh acres will be covered during 2022-23 itself.

“As the existing Oil palm seed gardens in the country are unable to



meet the demand, the Oil palm companies are importing Oil palm seed sprouts from Costarica, Thailand and Malaysia. To cover the notified potential area of 20 lakh acres in Telangana State, around 14.4 crore seed sprouts are required and of which 2.16 crores need to be imported during the current year to cover the proposed area of three lakh acres during 2022-23,” he said. 

He stated that due to the increased import tax, the Oil Palm seedlings which were priced at Rs 99 each after 85 per cent subsidy, were now costing Rs 240-250 each.

The Agriculture Minister said from the year 1991-92 to 2019, the import of Oil palm seedlings was considered under ITC HS 12099910 fruit seeds for planting or sowing and the import duty was levied accordingly. “The Change of Tariff head duty would be detrimental to the growth of Oilpalm sector in the State and country as well, having an unfavourable effect on the proposed expansion to bridge the demand-supply gap in edible oils across the country. 

Further, the seedlings are only meant to raise nursery and further distribution to the farmers, but not for any other commercial purposes, unlike palm nuts which are used to extract Palm Kernel Oil,” he added.