In India, import taxes on edible oils cut sharply as retail inflation rises

Published 2021년 10월 14일

Tridge summary

The Indian government has reduced the agriculture cess on imported oils from 20% to 5% and removed a 2.5% basic import duty, in an effort to combat rising retail inflation in "oils and fats". The move is expected to lower the effective import duty on crude and refined palm, soybean, and sunflower oil. However, analysts suggest that consumers may not see significant relief from these measures, as palm oil prices in Malaysia have increased following the duty cut announcement. The government's decision may also negatively impact farmers selling oilseeds.

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Original content

As retail inflation in edible “oils and fats” surged to second-highest level in 2021 in September, the government on Wednesday cut agriculture cess on imported oils to 5% and 7.5% on various items from 20% earlier while also removing 2.5% basic import duty.However, the duty reduction may not result in any big relief to consumers despite the government likely to lose about Rs 34,000 crore in revenues, analysts said, pointing to Wednesday’s increase in palm oil prices in Malaysia.“Consumers may not get full benefit of the duty reduction. In fact, after the duty cut was announced by India, the Malaysian market has gone up by about RM 150-170 per tonne,” said BV Mehta, executive director of Solvent Extractors Association of India.Wednesday’s announcement will translate into a reduction in effective import duty on crude and refined varieties of palm oil, soyabean oil and sunflower oil between 16.5 and 19.25 percentage points. The cut will be effective from October 14. The consumer ...

Source: Financialexpress