Detail

India

Oilseeds, oils and meals

All edible oils

01/01/2014

Trade

Import duty

Raised import duty on refined vegetable oils, widening the duty differential between crude and refined oil.

INDIA – vegetable oil import policy: India has modified the import duty structure for vegetable oils: the tax levied on imports of refined oils has been raised from 7.5 percent to 10 percent, while the import tariff for crude vegetable oils remains unchanged at 2.5 percent (see also MPPU Feb. ’13). As a result, the differential between refined and crude oil duties widened from 5 percent to 7.5 percent – a move meant to increase protection for the country’s refining industry, which was suffering from rising shipments of processed vegetable oils, notably refined palm oil. Last year, imports of refined palm oil surged (following the introduction of export incentives in Malaysia and Indonesia), pushing capacity utilization in Indian refineries below 40 percent. While welcoming the new tax structure, India’s processing industry reiterated that a duty differential of at least 10 percent would be necessary to persuade the trade to import crude oil rather than refined produce. However, considering government concerns about food price inflation, further increases in the import tariff for processed vegetable oils do not seem likely.