The duty-free import quota of 2 million tonnes of crude sunflower oil for the year 2023-24 has been eliminated by the central government. As a result, crude palm oil imports are expected to become more appealing from April 1, 2024, onwards. India’s palm oil imports primarily come from Indonesia, Malaysia, and Thailand. Previously, in May 2022, the government had authorized duty-free imports of 2 million tonnes of sunflower oil.
On Tuesday, the Indian government abolished the agriculture infrastructure development cess and customs duty on the import of crude sunflower oil and crude soyabean oil. The move is aimed at alleviating local prices, as well as mitigating inflation. The tariff rate quota of 20 lakh metric tonnes of crude sunflower oil and crude soyabean oil each for two fiscal years, 2022-23 and 2023-24, has been exempted from duty. The total import of 80 lakh MT on crude sunflower oil and crude soyabean oil can now be imported duty-free until March 31, 2024.
Solvent extractors of India (SEA) Executive Director B V Mehta said that the prices of soyabean oil are expected to decrease by Rs 3 per litre as a result of the duty exemption. The government’s notification states that the tariff rate quota for crude sunflower oil and crude soyabean oil will be subject to a removal of 5.5 per cent customs duty and agri infra development cess.
To combat surging prices, the government has taken a series of measures. Last week, it reduced excise duty on petrol and diesel, and waived import duty on some raw materials used in the steel and plastic industries. Additionally, export duty was increased on iron ore and iron pellets. The increase in prices across all items, from fuel to vegetables and cooking oil, has pushed the wholesale price inflation to a record high of 15.08 per cent in April and retail inflation to a near eight-year high of 7.79 per cent.
The Reserve Bank responded to the high inflation by holding an unscheduled meeting to raise the benchmark interest rate by 40 basis points to 4.40 per cent earlier this month. Regarding the probable impact on retail prices, Mehta informed PTI that the prices of soyabean oil are expected to fall by Rs 3 per litre. Furthermore, Mehta said that the country is likely to import 35 lakh metric tonnes of crude soyabean oil and about 16-18 lakh metric tonnes of crude sunflower oil this fiscal. The association has also requested that the government decrease the import duty on rice bran oil and canola oil to boost domestic supplies and control retail prices.
