India Hikes Import Tax on Edible Oils by 20 Percentage Points

India has increased the basic import tax on crude and refined edible oils by 20 percentage points to support local oilseed farmers. This could lead to higher edible oil prices, reduced demand, and lower imports of palm oil, soyoil, and sunflower oil. The total import duty on these oils will now rise to 27.5% and 35.75% respectively.

India has substantially increased the basic import tax on crude and refined edible oils by 20 percentage points, the government announced on Friday, in an effort to bolster local oilseed farmers.

This policy shift may hike edible oil prices and dampen demand, resulting in reduced overseas purchases of palm oil, soyoil, and sunflower oil. The new tax measures, effective from September 14, impose a 20% basic customs duty on crude palm oil, crude soyoil, and crude sunflower oil.

When combined with the Agriculture Infrastructure and Development Cess, the effective total import duty on these oils will soar to 27.5% from the previous 5.5%. Imports of refined varieties such as palm oil, soyoil, and sunflower oil will now attract a 35.75% import duty, up from the earlier 13.75% rate.

India, which satisfies over 70% of its vegetable oil demand through imports, sources palm oil predominantly from Indonesia, Malaysia, and Thailand, while soyoil and sunflower oil are procured from Argentina, Brazil, Russia, and Ukraine.

(With inputs from agencies.)