Govt raises import duty on ghee, butter to 40%

Government on Monday increased import duty on ghee, butter and butter oil by 10 percent to 40 percent and promised to take more such actions to safeguard the interest of domestic producers in wake of a glut in the global commodity markets. "We have taken a decision that starting from today, for a period of six months, we will be increasing the import duty on ghee, butter and butter oil from the present rate of 30 percent to 40 percent. So this will continue till March 2016," Revenue Secretary Hasmukh Adhia told reporters here.

The decision was taken based on the request from milk producers seeking duty protection as there was a big drop in the prices of ghee, butter and butter oil in the international market. Emphasising that more such actions could be taken to protect interest of domestic manufacturers, he said, adding there is a need to protect interest of domestic industry. "We are very cautious of the fact that the domestic industry may need some protection looking at the global situation and we are open to the idea, but the industry has to approach the respective authority with full justification of their demand," he said.

Providing effective protection to domestic industry and even to domestic farm sector has become big issue in global meltdown because there is glut of supply of the certain commodities, he said, adding, "now India has to take care of local industry and farm." Adhia asked industry to approach right authorities with proper justification with regard to raising duties. "They (industry) should effectively use the mechanism of safeguard as well as anti-dumping which is there in the country. It is not for us to take suo motu action, the industry has to make case for safeguard and anti-dumping," he said.

Based on recommendation of Directorate General of Safeguards and Directorate General of Anti-Dumping and Allied Duties, the Department of Revenue take action, he said. Recently the government imposed 20 percent safeguard duty on hot rolled to put a curb on import of cheaper steel from abroad. On increase in import duty on ghee and butter, National Dairy Development Board Chairman T Nanda Kumar said it is a "welcome step and in right direction as it will help the domestic farmers".

At the same time, there will not be any significant impact on retail prices, he added.