Last week, Mumbai-based Solvent Extractors' Association of India (SEA) had submitted representations with the ministries of finance, commerce and food, seeking the imposition of a 10% duty on crude vegetable oil and hiking the tax to 20% on refined oil.
Currently, the country doesn't tax crude vegetable oil imports but imposes a 7.5% duty on refined vegetable oil purchases from abroad.
Last month, the SEA had said large-scale imports of vegetable oil at lower prices had dragged down domestic oilseeds prices, hurting farmers. Soyabean prices have crashed to R3,300 per quintal from R4,800 during the sowing in summer.
Industry executives said recently-planted oil palm trees in some parts of the country were also being uprooted due to lower realisation, thanks to cheaper imports of crude palm oil.
The country imported a record 10 million tonnes of vegetable oils in 2011-12 as global prices stayed low due to huge surplus stocks in Malaysia and Indonesia.
The minister also said domestic sugar supplies remain steady and there is no panic with regard to production in the marketing year that started on October 1.