CCEA approves increase in import duty on refined oil to 10%

The government today increased import duty on refined edible oil to 10 per cent to protect the domestic processing industry and farmers.
The increase in import duty on refined edible oil from 7.5 per cent was approved by the Cabinet Committee on Economic Affairs (CCEA).
The move is expected to fetch the government Rs 600 crore in revenue, while retail prices of refined oils may increase marginally.
"The CCEA has approved increasing import duty on refined edible oil to 10 per cent," Food Minister K V Thomas told PTI after the meeting.
The agriculture, finance and commerce ministries supported the decision to maintain a 7.5 per cent import duty difference between refined and crude edible oils, he added.

The import duty on crude edible oil is currently 2.5 per cent. India imports more than 10 million tonnes of vegetable oils every year, which is almost 50 per cent of domestic need.

Local refiners are currently operating below capacity, which affects farmers as well, because importing refined edible oil has become more viable than buying crude edible oil from overseas.
"Domestic processors were losing Rs 1,500 per tonne for refining crude oil. After the hike in duty, losses will come down to Rs 500 per tonne, which is almost break-even level," said Angshu Mallick, Chief Operating Officer of Adani Wilmar, which sells the Fortune brand of edible oils.

On the impact on retail prices, he said, "Edible oil prices are on a downturn. There will be no impact due to duty hike."
Mallick said processors would now be able to run their plants, although the ideal difference in import duty between crude and refined edible oil should be 10 per cent.
"This is not enough as we have been demanding import duty difference of at least 12.5 per cent between crude and refined edible oils," said B V Mehta, Executive Director of the Solvent Extractors Association.
"It is unlikely that there will be any impact on prices. Prices will remain stable," he added.