New Delhi, May 31: The Centre on Friday reduced the basic custom duty on crude palm oil, crude soyabean oil and crude sunflower oil to 10 per cent, a move aimed at bringing down the retail prices of cooking oils and protecting domestic processors.
Earlier, the duty on these three crude edible oils was 20 per cent.
India imports more than 50 per cent of its domestic edible oil requirement.
India imported 159.6 lakh tonnes of edible oils during the 2023-24 oil marketing year (November to October), valuing Rs 1.32 lakh crore.
A notification in this regard was issued by the finance ministry on Friday with immediate effect.
When contacted, Union Food Secretary Sanjeev Chopra said the government has slashed the basic custom duty on crude edible oils to 10 per cent from 20 per cent.
Industry body Solvent Extractors Association of India’s (SEA) executive director B V Mehta said the basic custom duty on crude palm oil, crude soyabean oil and crude sunflower oil has been reduced to 10 per cent from the earlier 20 per cent.
The effective import duty (including the basic custom duty and other charges) on these three products will now be 16.5 per cent as against the 27.5 per cent earlier.
The basic custom duty on refined oil remains unchanged at 32.5 per cent.
At present, the effective duty on refined oils is 35.75 per cent.
Industry bodies SEA and the Indian Vegetable Oil Producers’ Association (IVPA) welcomed the decision.
They have been demanding increasing the duty difference between the crude and refined edible oils to protect the domestic processors.
In a late-night statement, SEA president Sanjeev Asthana said, “The government’s decision to increase the duty differential between crude and refined oils from 8.25 per cent to 19.25 per cent is a bold and timely move. It will discourage imports of refined palmolein and shift demand back to crude palm oil, thereby revitalising the domestic refining sector.”
The reduction in duty on crude oil will help reduce domestic prices, benefiting consumers, he added.
Mehta pointed out that imports of refined palm oil have risen of late, because it is cheaper than the crude palm oil.
India imports palm oil from Malaysia and Indonesia. Soyabean oil comes from Brazil and Argentina.
IVPA president Sudhakar Desai said, “We thank the government for accepting the IVPA recommendation to increase the duty differential between crude and refined edible oils to 19.25 per cent.”
It is a significantly bold move towards ensuring Make in India and also protecting the sector from the influx of refined oils, causing capacity injury to the vegetable oil sector, Desai said.
“This is a win-win situation for vegetable oil refiners and consumers, as the local price will go down due to the lower duty on crude oils,” Mehta said.
On September 14, 2024, the basic custom duty on crude soyabean oil, crude palm oil and crude sunflower oil was raised from 0 per cent to 20 per cent. (PTI)
