* Gap between crude and refined oils narrows
* Crude palm oil imports seen unlikely to fall drastically (Adds traders' comments, details)
By Manoj Kumar
NEW DELHI, Jan 17 (Reuters) - India has slapped a 2.5 percent import duty on crude edible oils, the government said on Thursday, in a move aimed at stemming imports by the world's top vegetable oil buyer and protecting domestic oilseeds growers.
India's farmers had been calling for action against cheap palm oil imports after Malaysia, the world's No. 2 palm oil producer, removed its export duty on the crude variant from Jan. 1.
Indian soyoil futures jumped to their highest in more than a month on Thursday's news, but quickly erased gains, as Malaysian palm oil futures fell more than 1.5 percent.
Traders said the move was less than expected and would neither stem imports nor help the domestic industry.
"I don't think we will see a significant slowdown in imports, given that Malaysia's export taxes for crude palm oil are at zero," said a Malaysian trader.
Imports from Malaysia, one of India's biggest suppliers, could hit a record in January after Kuala Lumpur ended its export duty, a senior industry official has said. Malaysia's move had sparked calls for retaliation from domestic producers.
"A 2.5 percent import duty is really not too bad. Manageable, in fact. We were expecting a five percent tax," said the chief executive of a listed Malaysian planter who asked not to be identified.
"Given the current scenario, Malaysia can still push out palm oil, given that our export tax is still at zero for January and also February."
India had already taken action in August to protect its domestic industry against price changes in palm oil by Indonesia, the world's leading producer.
India buys mainly palm oils from Indonesia and Malaysia and a small quantity of soyoil from Brazil and Argentina.
(Additional reporting by Ratnajyoti Dutta in NEW DELHI and Niluksi Koswanage in KUALA LUMPUR; Editing by Clarence Fernandez and Jo Winterbottom)