FX.co ★ India Cuts Import Tax on Crude Edible Oils to Lower Costs, Boost Refining

Last Friday, India significantly reduced the basic import tax on crude edible oils to 10% in an effort to decrease food prices and bolster its domestic refining sector. This reduction impacts crude palm oil, crude soyoil, and crude sunflower oil, effectively lowering the total import duty on these commodities from 27.5% to 16.5% when additional charges such as the Agriculture Infrastructure and Development Cess and Social Welfare Surcharge are included. "This initiative is advantageous for both vegetable oil refiners and consumers, as the reduction in duties will lead to lower local prices," stated B.V. Mehta, executive director of the Solvent Extractors’ Association of India. Import duties on refined oils remain at 35.75%, creating a 19.25% differential between refined and crude oil duties. This policy change is anticipated to increase the importation of crude oils, thereby enhancing domestic refining activities. India imports more than 70% of its vegetable oil, obtaining palm oil from Southeast Asia, and soyoil and sunflower oil from Latin American countries, Russia, and Ukraine.