India reduces duties on vegetable oils, which could increase pressure on prices

India has reduced basic import duties on key vegetable oils to curb rising domestic prices ahead of the peak consumption season.

 

The biggest changes concern sunflower oil. The basic duty on crude sunflower oil has been reduced from 10% to zero, and on refined oil from 32.5% to 22.5%. At the same time, the duty on crude palm and soybean oil has been reduced from 10% to 5%, and on refined palm and soybean oil from 32.5% to 27.5%.

 

The decision comes after domestic vegetable oil prices in India have risen by almost 20% in the past year. The government hopes that reducing the import burden will help contain prices and support consumption during the major religious festival season from September to November.

 

Taking into account additional targeted duties, the actual duty on imports of crude sunflower oil will decrease from 16.5% to 5.5%, and on crude palm and soybean oils - from 16.5% to 11%.

 

The reduction in tariffs could encourage increased vegetable oil imports into India and support demand in external markets. At the same time, the reduction in import costs would increase supply competitiveness and could increase pressure on domestic and global vegetable oil prices.