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India is considering raising the import taxes on crude and refined vegetable oils to protect local farmers and the refining industry, two government sources said on Monday, as purchases by the world's top importer are expected hit a record this year.
The government could increase the duties on both crude and refined vegetable oils by more than five per cent, said an official who is part of the decision making process. Currently India imposes a 2.5 per cent tax on crude oils and 10 per cent on the refined variety.
“We are considering an increase in the import tax but it is not going to happen immediately because the official process will take some more time,” said another government official directly involved in the decision making process.
The first source said that a final decision on the duty hikes will be taken by the Finance Ministry.
Hit by cheaper imports, industry body the Solvent Extractors Association of India (SEA) has petitioned the government to raise the duty on crude oils to 10 per cent and 25 per cent on refined products. India is likely to import a record 13 million tonnes (mt) of edible oils in the new year beginning November, up from an estimated 11.6 mt this year, including 8 mt of palm oil. New Delhi imported a record 10.4 mt of edible oils in the 2012-13 year, data from SEA showed.
Nearly 60 per cent of India's annual edible oil demand of 18-19 mt is met by imports, consisting mainly of palm oil sourced from Indonesia and Malaysia.
India also buys tiny amounts of soyoil from Latin America and sunflower oil from the Black Sea region.
