However, the modalities of the import are yet to be worked out, sources said.Though the imports will be subject to plant quarantine measures (regarding pest risk) it will increase the oilseeds availability raw material strapped edible oil industry.

India has been consistently facing edible oil shortage to the tune of 16-20 lakh tonnes which leads to higher forex outgo. The permission to import all oilseeds under OGL will not only save direct outflow of forex in importing edible oils but will bring in forex through exports of oilmeals, residue of thecrushed oilseeds.

India has been importing edible oils from the global market to meet the shortage in domestic supply. The country had imported approximately 20 lakh tonnes of edible oil in the oil year 1997-98 (November 97-October 98). The permission to import all oilseeds under OGL has been a long standing demand of the industry facing an acute shortage of raw material.

The government had allowed to import one lakh ton of soyabean in March 98 and had subsequently allowed import of sunflower seed as well. However, the industry found it incompetitive to import these oilseeds as there was no price parity.

A major benefit of permitting imports of oilseeds is that it will boost the export effort. After the oil is extracted, the residual product -- oilcakes and oilmeals-can be exported. India can carve a niche for itself in the export of oilmeals and oilcakes, which has tremendous demand overseas. The products are used as animal feed globally.

The decks for permitting import of oilseeds have been clearedafter a gap of almost 18 years. However, the import is likely to be permitted only for crushing purposes and not for sowing. The industry had been pleading to all successive governments that the country should be importing oilseeds alongwith oils.

Earlier the agriculture ministry had formed a sub-committee to look into aspects relating to imports of oilseeds for crushing purposes. The three-member sub-committee had submitted its recommendations by early April. The report had look into the issue of plant quarantine which was the deciding factor for allowing import of these oilseeds.

The committee chaired by KM Chadhha, joint secretary (plant protection), ministry of agriculture had discussed the issue of imports of oilseeds and oil-bearing materials was discussed at length and the quarantine officials confirmed that there would not be any problem from the plant quarantine angle for imports of ricebran and its oilcake.

Currently, India exports 4.3 million tonnes of oilmeals, annually bringing in $875million of foreign exchange. Thus, the plan to import oilseeds (for crushing purposes only) will further give a boost to the export potential.Imports of oilseeds and oil-bearing materials (like oilcakes) were hitherto banned through an umbrella order in the belief that imports may also bring in some disease spreading pests that could disturb/destroy the local crop of oilseeds. However, the import of edible oil is allowed freely under open general licence. -The committee had looked into pest risk analysis (PRA) in respect of soyabean, sunflower seed and rapeseed, and had recommended imports of these oilseeds.

These oilseeds are mainly used for crushing purposes, the extractions of which are then used as protein material for animal feed. The oil extracted is then marketed in the open market. Thus, there is no fear of virus-generating pests also being imported with their imports.

A decision to allow import of oilseeds will bail out the raw material-strapped oil crushing industry in a country that boasts ofa large oil-crushing capacity. The country has about 15,000 oil mills spread across the country, over 600 solvent extraction plants, 300 vegetable oil refineries and 175 hydrogenation plants.

The mammoth crushing capacity in country churns out 70 to 75 lakh tonnes of vegetable oil annually. The average utilisation of installed capacity is somewhere around 35-40 per cent, which means that a large 60 per cent capacity remains unutilised for want of raw material-oilseeds.

The country has not yet attained world-level average yields in oilseed production. It lags far behind despite the fact that the potential has been underutilised.

The current oilseeds productivity in India is 851 kg per hectare against the world average of about 2,500 kg per hectare. The irony is there has not been any attempt to increase the yield.

According to trade circles, there was a tussle between the commerce ministry and the agricultural ministry on the issue of permitting oilseeds import.

While the commerce ministry was infavour of oilseed imports, the agriculture ministry had raised the single issue of quarantinen -- meaning the imported seeds could be contaminated and bear diseases.

ICAR scientists have till now believed that the imported oilseeds might contain inherent pests or diseases that may go into sowing. But traders say this is only an excuse to prevent imports. They are of the view that initially imports could be confined to ricebran, sunflower seed, rapeseed `00' variety and other oil-bearing material, which are mostly byproducts of oil-bearing seeds and do not go into sowing. These products do not fall under high plant quarantine risk and thus are safe to import. It seems that this argument has found favour with the government.

The oilseeds were allowed to be imported earlier during the three-year period of the Janata government (from 1977 to 1979). They had argued that Japan and other European countries like Holland and Germany continued importing various kinds of oilseeds like soyabean, rape andlinseed.

Centre agrees to permit oilseed imports under OGL.