MUMBAI: India halved the basic import tax on crude edible oils to 10% on Friday, the government said, as the world’s biggest vegetable oil importer tries to bring down food prices and help the local refining industry.
The customs duty applies to crude palm oil, crude soyoil and crude sunflower oil.
It will effectively bring down the total import duty on the three oils to 16.5% from earlier 27.5% as they are also subject to India’s Agriculture Infrastructure and Development Cess and Social Welfare Surcharge.
“This is a win-win situation for vegetable oil refiners as well as consumers, as local prices will go down due to the duty reduction,” said B.V. Mehta, executive director of the Solvent Extractors’ Association of India (SEA).
The government did not change the import duty on refined palm oil, refined soyoil or refined sunflower oil, which currently attract a 35.75% import tax.
The import duty gap between refined and crude edible oils has risen to 19.25%, which will prompt importers to bring in crude edible oils instead of refined oils and boost the local refining industry, Mehta said.
India meets more than 70% of its vegetable oil demand through imports. It buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.
Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage, said the cut in the basic duty would bring down edible oil prices and help revive retail demand, which has been subdued in recent months.
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