all Sri Lankan factories manufacturing edible oil for export to India have shut down production in protest against India's decision to restrict the product's duty-free import. Local officials, however, are hopeful of a settlement.

On June 4, India announced controls on vanaspati imports from Sri Lanka, saying only the state-run National Agricultural Cooperative Marketing Federation (nafed) could import duty-free oil, bakery shortening and margarine. The move came under pressure from Indian producers worried about the fact that the oil imported from Sri Lanka was much cheaper than theirs. Ironically, the dispute is between two sets of Indian producers