AreaIndia

Commodity GroupOilseeds, oils and meals

CommodityVegetable oils

Date01/01/2021

Policy CategoryTrade

Policy InstrumentImport policies (tariff measures)

DescriptionRaised the import tariffs for crude palm oil, crude degummed soyoil and palm olein, with a view to protecting domestic oilseed producers. At the same time, basic customs duties charged on edible oil imports were lowered in a bid to support consumers.

NotesINDIA – import policies: After lowering the duty collected on crude palm oil imports in November 2020 (see MPPU Jan.’21), in January, the Government raised the import tariffs for crude palm oil, crude degummed soyoil and palm olein by an average 6 percent, with a view to protect domestic oilseed producers. Furthermore, in February, the Government released its annual budget for fiscal year 2021/22 (April-March), which included the introduction of an Agriculture Infrastructure Development Cess (AIDC). The tax will apply to a wide range of agricultural and non-agricultural goods, including imported crude palm, soy and sunflowerseed oil. Proceeds from the tax will be used to finance infrastructure development projects and related activities, with the ultimate goal of raising agricultural production and containing imports. At the same time, the Government decided to reduce basic customs duties charged on edible oil imports so as not to burden consumers. As a result of these adjustments, the effective import duty for crude palm oil climbed from 30.25 percent to 35.75 percent, while that for crude soy and sunflowerseed oil remained unchanged at 38.5 percent. The adjustments imply a reduction in the duty advantage previously enjoyed by palm oil.