India has lowered import duties on crude edible oils by 10pc effective from 31 May, according to a statement published on the ministry of finance website on 30 May.
Customs duties applied to crude palm, crude soybean, and crude sunflower oils were reduced to 10pc from an earlier 20pc. These oils now face effective import duties of 16.5pc compared to 27.5pc previously, including a separate agriculture infrastructure and development cess and a social welfare cess.
But import duties for refined versions of the oils were unchanged at 32.5pc. The total effective import tax rate on refined palm, soybean, and sunflower oils remains at 35.75pc.
Keeping duties on imported refined oils unchanged is expected to provide relief to the domestic refining industry because it will likely raise the rate of vegetable oil refining in the country, according to Anilkumar Bagani, commodity research head of Indian vegetable oil brokerage Sunvin Group.
The move is likely to drive an increase in crude vegetable oil imports, displacing imports of refined oils, Bagani said. This could lower end product vegetable oil prices in India in the short term. But the increase in Indian demand could also cause crude vegetable oil prices to move higher at their respective origins, which could counteract the government's initial objective of lowering prices for the end consumer, he added.
