While appreciating the imposition of a higher level of duty, vanaspati producers feel that even with this duty structure there is enough scope for unscrupulous elements to pass off RBD palm oil as vanaspati in the domestic market.

Speaking to The Financial Express, I R Mehra, executive director, Indian Vanaspati Producers' Association (IVPA), said that despite a duty of 38.5 per cent, RBD palm oil would be available at a much cheaper price than vanaspati. This is because vanaspati contains several costly ingredients like vitamins, pufa and sesame, and it also needs to be processed.

"AsRBD oil does not have any nutritious content, prices can be kept very low."IVPA has made representations to the Director General of Foreign Trade and secretaries in the ministry of commerce and ministry of sugar and edible oil pointing out their problems.

Mehra said that the ministries have said that they would be unable to change the duty rates. However, they said that there would be strict vigilance at the ports to see that palm oil is not packed in the form of vanaspati by traders.

But Mehra feels that this kind of regulation would not work because once the traders take the ware to their units they cannot be prevented from selling the oil as vanaspati to customers. "I do not think that we can put in place such an efficient regulatory system which can prevent it".

Another problem which might emerge as a result of lifting import restrictions on RBD palm oil is that tallow can make its way into the country in its guise, said Mehra.

Referring to the crisis the country faced in 1983 when tallow wasbeing passed off as vanaspati, Mehra said that the country might face a similar situation again as tallow has a strong resemblance to RBD oil.

The government will now be faced with a double task of first running a phytosterol acetate test to detect tallow content in RBD oil and then to prevent its sale in the guise of vanaspati.

The vanaspati industry is also threatened by the inclusion in the OGL list of stearin and palm kernel oil. Stearin is an animal fat being presently used for the manufacture of soaps. "Both the products can easily be used for adulteration of vanaspati".

Mehra said that the industry has started sending alert signals to the government asking it to take steps immediately to prevent the damage of the domestic vanaspati industry.

"We don't know what obligations the government has under the WTO treaty, but it certainly has an obligation to save the domestic industry as well.""Our country does have a shortage of oil but the government should not do things in an irrational way and putthe interests of the country's industry at stake," said Mehra."To promote the interests of foreign countries, the domestic industry should not get a beating."