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PM hints at hike in customs duty on farm products

Prime Minister Atal Bihari Vajpayee on Wednesday indicated that the government could further hike customs duty on agricultural products to discourage imports and safeguard the interests of farmers.

"Though we have opened up the markets to foreigners under compulsions of an agreement signed by the previous government, we have imposed high rate of duties that would make foreign products costlier than the domestic ones," Vajpayee said at a public rally after dedicating to the nation world's longest exclusive LPG pipeline constructed by Gas Authority of India Ltd in Loni in Uttar Pradesh.

The PM said "we can hike the customs duty further to provide a cushion to farmers and protect their interests."

The government had in the General Budget for 2001-02 announced an increase in customs duty on tea, coffee, copra and coconut and dessicated coconut oil from 35 per cent to 70 per cent.

Similarly, the rate of duty on crude edible oils was increased from 35-55 per cent to a uniform rate of 75 per cent and on refined oils from 45-65 per cent to 85 per cent.

"I wish to assure you that in order to safeguard the interest of our farmers, we shall move swiftly whenever any perceptible threat on account of imports is noticed", he said.

Vajpayee said the government was bound by the World Trade Organisation agreement signed by the previous government and had to open up markets under compulsion.

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