NEW DELHI: India has reduced the basic import tax on edible oils by 10 percentage points, a move that is expected to improve domestic retail cooking oil demand.
This move reduces the basic duty on crude palm oil (CPO), crude soybean oil and crude sunflower oil to 10 per cent from 20 per cent.
The effective import duty, which includes agriculture infrastructure and development cess and social welfare surcharge, on crude edible oils will now be 16.5 per cent compared with 27.5 per cent earlier.
The Indian Vegetable Oil Producers' Association (IVPA) welcomed the government's decision to slash the duty on crude edible oil imports while leaving it unchanged for refined oils.
“This move will not just strengthen the domestic refining capacities of Indian refiners but also ensure a fair price to oilseed farmers and a fair price to the consumers,“ the trade body’s president, Sudhakar Desai, said in a statement.
India is the world's biggest importer and second-largest consumer of edible oils.
Nepalese refiners have significantly increased their sales to India under the South Asian Free Trade Area (SAFTA) rules since the Indian government raised the basic customs duty on crude edible oils from zero to 20 per cent and from 12.5 per cent to 32.5 per cent on refined products in September last year.
Indian oilseed crushers had said the narrow duty differential between the crude and refined varieties was hurting their interests.