India may stop the import of duty-free vanaspati (vegetable oil) from Sri Lanka because of a sudden quantum jump in its export to this country.

Vanaspati imports from Sri Lanka to India shot up to 1,70,000 tonnes last year from a paltry 10,000 tonnes in 2004, prompting representations to the government here from worried domestic vanaspati manufacturers.

As a result, India is considering invoking unilateral safeguard measures under its Free Trade Agreement (FTA) with Sri Lanka, according to "Business Standard," a leading business daily here.

The issue of invoking safeguard measures under Article 8 of the India-Sri Lanka FTA was discussed at a meeting here early this week between Indian Agriculture Minister Sharad Pawar and Commerce and Industry Minister Kamal Nath.

A committee headed by Prime Minister Dr Manmohan Singh’s Principal Secretary TKA Nair is also examining the issue of duty free imports of vanaspati coming into India under bilateral trade agreements with Sri Lanka and Nepal.

Article 8 of the India-Sri Lanka FTA, which New Delhi may invoke in this case, says: "If any product, which is the subject of preferential treatment under this agreement, is imported into the territory of a contracting party in such a manner or in such quantities as to cause or threaten to cause serious injury in the importing contracting party, the importing contracting party may, with prior consultations except in critical circumstances, suspend provisionally without discrimination the preferential treatment accorded under the agreement."