India slashes import duties on major edible oils to ease domestic price pressure
Vegetable oil prices in India have gone up by about 20% over the past year.
India today (September 24) announced a sharp reduction in import duties on major edible oils, in a move aimed at easing domestic prices and containing inflationary pressures amid a steep rise in global edible oil prices.
The government has reduced the Basic Customs Duty (BCD) on major imported crude edible oils, said the Ministry of Consumer Affairs, Food and Public Distribution in a statement.
Accordingly, the BCD on crude sunflower oil has been reduced from 10% to nil, while the same on crude soya bean oil and crude palm oil was cut from 10% to 5%.
Keep updated, follow The Business Standard's Google news channel
The government has simultaneously reduced the applicable BCD on the respective refined edible oils while maintaining an import duty differential of 19.25% between crude and refined edible oils.
According to the statement, the duty cuts take into account the increase in international edible oil prices and the consequent rise in domestic landed costs and retail prices.
Import duties constitute an important component of the landed cost of imported edible oils and, therefore, have a bearing on domestic market prices.
The statement mentioned the reduction in BCD on crude edible oils is expected to lower their landed cost and facilitate the transmission of the benefit through the domestic supply chain.
"The measure is intended to provide relief to consumers while contributing to the broader objective of containing food-price and overall inflationary pressures," it added.
The government maintained that the import duty differential between crude and refined edible oils is aimed at supporting the utilisation of domestic refining capacity and discouraging excessive imports of refined edible oils.
The measure is expected to provide a more level-playing field for domestic refiners while supporting continued value addition within the country, according to the statement.
The statement asked edible oil associations and industry stakeholders to ensure that the full benefit arising from the reduction in import duty is passed on to consumers.
Industry stakeholders have been requested to immediately revise their Price to Distributors (PTD) and Maximum Retail Price (MRP) in accordance with the reduction in landed costs, it said.
Vegetable oil prices in India have gone up by about 20% over the past year.
India meets nearly two-thirds of its vegetable oil demand through imports, mainly palm oil, soya oil and sunflower oil from Malaysia, Indonesia, Argentina, Russia and Ukraine.
