NEW DELHI (Reuters) – India’s vegetable oil industry has urged the government to widen the import tariff differential between crude and refined varieties to discourage imports of processed oils and support domestic refining capacity.
The vegetable oil industry has invested heavily in port-based refineries to process imported crude oils locally, creating jobs, but rising imports of refined varieties have hurt India’s interests, said the Solvent Extractors Association of India (SEA).
Suppliers from Indonesia and Malaysia have been exporting more refined oils than crude, leading to lower capacity utilisation at Indian refineries, the SEA said in a letter to food minister Pralhad Joshi.
The current import tariff gap between crude palm oil and refined palm oil is too narrow to curb rising imports of processed grades, the SEA said.
The government should either increase tariffs on refined varieties or reduce tariffs on crude palm oil, the SEA said.
A government spokesperson did not immediately respond to a request for comment.
In September 2024, India imposed a 20% basic customs duty on crude and refined vegetable oils.
Following the move, crude vegetable oils attract a 27.5% tax, while refined grades now have a 35.75% import duty.
India meets nearly two-thirds of its vegetable oil demand through imports. It buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.
(Reporting by Rajendra Jadhav and Mayank Bhardwaj. Editing by Mark Potter)
