India seeks to limit imports of refined oil

The Indian edible oil industry has urged the government to increase the import tariff differential between crude and refined grades to curb imports and support domestic refining capacity.

The Securities Exporters Association (SEA) on Thursday said edible oil producers have invested heavily in port-based crushing plants to process imported crude oil, creating jobs, but rising imports of refined grades are hurting India’s economic interests.

Suppliers in Indonesia and Malaysia are exporting more refined oils than crude, leading to lower capacity utilisation at Indian mills, the SEA said in a letter to Food Minister Pralhad Joshi.

The SEA said the existing import tariff differential between crude palm oil and refined palm oil is too narrow to curb rising imports of refined grades. The government should either increase tariffs on refined grades or reduce tariffs on crude palm oil, the SEA said. So far, the country’s authorities have not responded to the call from industry representatives.

In September 2024, India introduced a basic customs duty of 20% on crude and refined vegetable oils. Following this decision, crude vegetable oils are taxed at 27.5%, while the import duty on refined varieties is now 35.75%.

Earlier, it became known that in April, the share of palm oil in India’s total vegetable oil imports fell to 43% from 61% a year earlier, while the share of soybean and sunflower oils increased to 57%. India meets almost two-thirds of its vegetable oil demand through imports. It buys palm oil mainly from Indonesia, Malaysia and Thailand, and imports soybean and sunflower oil from Argentina, Brazil, Russia and Ukraine.

Tags: soybean oil, India, palm oil, imports, edible oils, restrictions, sunflower oil