NEW DELHI - India's oilseed growers have urged the government to raise the import tax on palm oil, the most widely used vegetable oil, to help support thousands of local farmers reeling from a crash in domestic rapeseed prices.

"We have requested Prime Minister Narendra Modi to personally look into the issue of falling oilseed prices and the need to raise palm oil import duty," Rampal Jat, national president of the Kisan Mahapanchayat farmers' council, told Reuters.

Last year India abolished the basic import tax on crude palm oil (CPO), but it continues with a 5% tax known as the Agriculture Infrastructure and Development Cess on CPO imports.

India levies a 12.5% import tax on refined, bleached and deodorized palm oil.

The government also needs to instruct its agencies to buy rapeseed at guaranteed prices, which would provide immediate relief to farmers, Jat said.

Domestic rapeseed prices have dropped to 4,500 rupees ($55) to 4,700 Indian rupees per 100 kg, lower than the government-set minimum support price of 5,450 rupees per 100 kg.

"Only last year, most farmers received 8,000 rupees for their rapeseed crop, so the fall in prices is quite steep," said Rameshwar Prasad Choudhary, a rapeseed grower from the western state of Rajasthan, which accounts for more than half of India's rapeseed production.

Lower oilseed prices could force some farmers to switch to other crops, said Sandeep Bajoria, CEO of Mumbai-based vegetable oil brokerage and consultancy Sunvin Group.

India's vegetable oil imports cost around $18 billion annually, and Modi has often urged farmers to boost oilseed output to cut India's rising import bill for the staple.

The Solvent Extractors' Association of India, the top vegetable oil industry body, has pegged this year's rapeseed output at a record 11.5 million tonnes.

($1 = 81.7800 Indian rupees)

(Reporting by Mayank Bhardwaj; Editing by Jan Harvey)