Indian tax holiday on sunflower and soybean oil imports to affect market after June
Refined Soybean Oil
Crude Sunflower Oil
India
Published May 31, 2022
Tridge summary
India’s complete tax waiver on annual imports of 2 million mt each of crude sunflower and soybean oil may pressure palm oil imports, but the impact on the world’s largest vegetable oil buyer will be visible only after June, market sources have told S&P Global Commodity Insights.
Original content
India announced May 24 a tariff rate quota that allows for the duty-free annual imports from May 25 through March 2024, in a bid to cool inflation in domestic edible oil prices. This reduces the effective import tax rate on both the soft oils to zero from 5.5%. Vegetable oil refineries will have to apply for a license from the Directorate General of Foreign Trade, India’s trade watchdog, to obtain the quotas, also known as TRQs. Applications must be submitted by June 16 as allocation will take at least 15 days, Indrajit Paul, senior manager at Gurgaon-based Origo Commodities, told S&P Global. “The tax benefit shall apply to fresh imports only,” Paul said. Zero-duty sunflower and soybean oil imports will take time and the old cargo will be released at the existing 5.5% duty, sources say. This may lead to tightness in the supply of these oils in the short term as licenses to import them will have to be routed through the foreign trade directorate, or DGFT, RK Singhal, who runs his ...
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