India cuts import taxes on vegetable oils to calm prices, Retail News, ET Retail
The reduction in taxes could lower the prices of edible oils in India and boost consumption, thus increasing overseas purchases by the South Asian country.
The basic import tax on crude palm oil has been reduced from 10% to 2.5%, while the tax on crude soybean oil and sunflower oil has been reduced by 7, 5% to 2.5%, the government said in a notification Friday night. The basic import tax on refined grades of palm oil, soybean oil and sunflower oil has been reduced from 37.5% to 32.5%.
After the cuts, imports of crude palm oil, soybean oil and sunflower oil will be subject to a tax of 24.75% in total, including a base import duty of 2.5 % and other taxes, while refined grades of palm oil, soybean oil and sunflower oil will carry a tax of 35.75% tax in total.
India meets more than two-thirds of its edible oil demand through imports and has struggled to contain a rally in local oil prices in recent months.
The country imports palm oil mainly from major producers in Indonesia and Malaysia, while other oils, such as soybeans and sunflowers, originate from Argentina, Brazil, Ukraine and Russia.
The tax reduction would lower the prices of edible oil ahead of major festivals, when demand for edible oil increases in the country, said Govindbhai Patel, managing director of trading firm GG Patel & Nikhil Research Company.
New Delhi reduced import taxes on palm oil, soybean oil and sunflower oil, but kept import duties on crude rapeseed oil at 38.5%, said BV Mehta, executive director of the Solvent Extractors’ Association of India.
“There is also a need to reduce import taxes on rapeseed oil since the price has almost doubled in a year,” Mehta said.