The finance ministry is pushing for rationalisation of import duties on edible oils like palm oil, mustard oil and coconut oil in the Budget.

The proposal to allow import of oilseeds is, however, unlikely to go through following opposition from the agriculture ministry.

The finance ministry intends to announce a roadmap for duty reduction based on the recommendations of an inter-ministerial task force headed by Chief Economic Advisor Ashok Lahiri. But the task force has not been able to arrive at a consensus yet on importing oilseeds.

• Run-up to the Budget 2005-06

At a recent meeting, the agriculture ministry opposed the move on the grounds that it would adversely affect domestic growers and allow genetically modified seeds to enter the Indian market.

On the other hand, the finance and the commerce ministries are of the opinion that nearly 60 per cent of the refining capacity is under-utilised and oilseed imports will help increase domestic production.

Further, the food department, also part of Agriculture Minister Sharad Pawar's portfolio, is seeking a mechanism for periodically reviewing the tariff value for edible oil. The tariff value is the base price on which the Customs duty is levied.

There is a strong case for the rationalisation of the import duty structure as coconut oil, consumed as edible oil only in Kerala, attracts 85 per cent duty, while mustard oil, used in eastern India, also attracts over 60 per cent duty, an official said.

"The thinking is that over the long term, the duties must be progressively reduced. We are looking at a roadmap. The committee is expected to finalise its recommendations soon," the official said.

A decision on this is taking time because of the divergent positions of different ministries on the issue. While the agricultural ministry is in favour of hiking the peak import duties to protect domestic oilseeds growers, the consumer affairs department is keen for a reduction to bring down the prices.

Taking up positions Finance: Intends to announce a roadmap for duty reduction based on the recommendations of a task force headed by Chief Economic Adviser Ashok Lahiri.

• Agriculture: Opposes the move on the grounds that it would adversely affect domestic growers and allow GM seeds to enter the Indian market
• Finance, Commerce: 60% of the refining capacity is under-utilised and oilseed imports will help increase domestic production.