AreaIndia
Commodity GroupOilseeds, oils and meals
CommodityCrude/refined palm oil
Date01/06/2021
Policy CategoryTrade
Policy InstrumentImport policy
DescriptionConcerned about persistently high edible oil prices in domestic markets, the Government i) lowered the ad valorem import tariff for crude palm oil by 5 percentage points (leading to an effective overall tax rate of 30.25 percent); and ii) removed import restrictions for refined palm oil, which would attract an effective duty of 41.25 percent. The tariff reduction and the import deregulation would remain in place for, respectively, 3 and 6 months.
NotesINDIA import policies import tariffs: Concerned about persistently high edible oil prices in domestic markets, the Government lowered the import tariff for crude palm oil by 5 percentage points for the period 30 June to 30 September 2021. With the tariff reduction, crude palm oil imports attract an overall tax rate of 30.25 percent. Regarding the composition of Indias vegetable oil imports, the share of palm oil is expected to rise, given that in the absence of duty reductions for competing vegetable oils the tariff advantage enjoyed by palm oil has increased. The Government also removed import restrictions for refined palm oil (in place since January 2020 - see MPPU Mar.20), setting the commoditys import tariff at 37.5 percent, which implies an effective duty of 41.25 percent. The import deregulation and the tariff reduction are set to remain in place for, respectively, 6 and 3 months. The deregulation of refined palm oil imports is expected to encourage purchases from Indonesia, Indias main supplier of the commodity. According to recent industry reports, palm oil origin prices have risen since India reduced its tariffs, as traders anticipated demand from the worlds leading importer to increase implying that landed prices of palm oil in India have fallen only minimally or even increased.
