Restriction on import of biodiesel and mixtures not applicable on raw material, DGFT

by Autocar Pro News Desk , 10 Dec 2018

In a big relief to biofuel manufacturers, the Directorate General of Foreign Trade (DGFT) has clarified that biofuel manufacturers can import raw material without any restrictions. Hence the restrictions on the import of biodiesel and mixtures, is not applicable to raw material imports, for manufacturing by biofuel manufacturers who fulfil conditions of being an ‘actual user’.

In an earlier notification, the DGFT had said that biodiesel and mixtures would fall under the restricted category, with proposed policy condition saying that the import is allowed only for non-fuel purposes subject to actual user condition.

This led to manufacturers of bio-fuels seeking a clarification from DGFT for importing the raw materials required to manufacture the fuel, stating that since they are the actual user and goods imported cannot be used for fuel purpose and could only be used for home consumption, while they were a manufacturing unit, thus fulfilling the conditions set for import.

The definition of actual user as per the Foreign Trade Policy 2015-20 says that the ‘Actual user (industrial) is a person (either natural/legal) who utilises imported goods for manufacturing in his/her own industrial unit or manufacturing for his/her own use in another unit including a jobbing unit which has a definitive postal address.

In a clarification sought by domestic biodiesel manufacturer, My Eco Energy (MEE), on November 12, 2018, the DGFT clarified that these items can be imported by them without a license from DGFT. 

Welcoming the move, Santosh Verma, MD, My Eco Energy said, “India needs to up the usage of biofuels largely in the commercial sector which is hugely dependent on diesel. With this relief by DGFT, we shall be able to supply ‘Indizel’ to the commercial sector and bring down the country’s dependence on fuel imports and petroleum products both. In short- and long-term both this will result in helping the economy and health of citizens get better.”

Also read: Centre clears new biofuel policy, will invest Rs 5,000 crore and offer tax sops

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