India. Basic customs duty on edible oils increased by 20%

The Indian government has increased customs duty on crude palm oil and refined sunflower oil to 20% and 32.5% respectively. As stated by the government, the measures are aimed at supporting soybean and oilseed farmers. The changes are expected to increase government revenue and boost farmers’ income, the Times of India reported.

According to a finance ministry notification, the basic customs duty on crude palm oil, soybean oil and sunflower oil has been increased from 0 to 20%. The basic customs duty on refined palm, soybean and sunflower oil has been increased from 12.5% to 32.5%. The effective duty on oils will increase from 5.5% to 27.5% and from 13.75% to 35.75% respectively.

“This is a significant support for soybean and oilseed farmers. Farmers from Maharashtra and Madhya Pradesh will benefit immensely as they account for a significant portion of the production of these oilseeds,” a state government official commented on the decision. The official added that these measures have been made possible due to the government’s effective management to curb domestic edible oil prices, which have been continuously falling for almost two years now.

Apart from Madhya Pradesh and Maharashtra, other major oilseed producing states are Gujarat, Rajasthan, Karnataka, Andhra Pradesh, Uttar Pradesh, Telangana and Tamil Nadu.

Earlier, the government had set a value of $550 per ton as the minimum export price, which essentially meant that farmers could not sell their produce abroad below that rate.

Earlier, the fact that India plans to impose a duty on vegetable oil imports was reported by Reuters, citing its own sources. The country imports more than 70% of its vegetable oil needs, mainly buying palm oil from Indonesia, Malaysia and Thailand, as well as soybean and sunflower oil from Argentina, Brazil, Russia and Ukraine. India is seeking to reduce its high dependence on edible oil imports, with the government saying it intends to increase oilseed yields, expand planting areas and introduce a dynamic import duty structure to ensure that domestic prices are not affected by cheaper imports.

Translated with DeepL.com (free version)

Tags: soybean oil, India, palm oil, sunflower oil