The Indian government on Tuesday exempted customs duty and agri cess on yearly import of 20 lakh MT each of crude soyabean and sunflower oil till March 2024 to ear domestic prices, according to an official notification.
The duty-free import of 20 lakh MT per year will be applicable for two FYs (2022-23, 2023-24) for crude soyabean oil and crude sunflower oil, the Finance Ministry said in a notification.
The development comes as India, the world's biggest vegetable oil importer tries, to keep a lid on local prices. This will provide significant relief to consumers.
The exemption will help cool domestic prices and control inflation. "This will provide significant relief to the consumers,” the CBIC tweeted.
The reduction in the duty, known as the Agriculture Infrastructure and Development Cess (AIDC), could bring down domestic prices and help consumers and domestic refiners cushion the blow from surging food costs.
India has already abolished the basic import tax on crude palm oil, crude soyoil and crude sunflower oil, but continues with the 5% AIDC on these three grades of edible oils.
India has been struggling to contain a rally in local edible oil rates in recent months, and Russia's invasion of Ukraine has made it even more difficult for the government to tame vegetable oil prices.
Last week to control spiralling prices, the government had cut excise duty on petrol and diesel and also waived import duty on some raw materials used in steel and plastic industry. Besides, export duty was hiked on iron ore and iron pellets.
A rise in price across all items from fuel to vegetables and cooking oil pushed WPI or 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.
High inflation prompted the Reserve Bank to hold an unscheduled meeting to raise the benchmark interest rate by 40 basis points to 4.40 per cent earlier this month.
India imports palm oil mainly from Indonesia and Malaysia, while other oils, such as soy and sunflower, come from Argentina, Brazil, Ukraine and Russia. The country's palm oil imports in June are unlikely to spike despite Indonesia's decision to lift its ban on overseas shipments.
(With inputs from agencies)
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