India had reduced the import duty on crude palm oil (CPO) from 27.5 per cent to 15 per cent, effective Feb 2, 2021 in its Budget 2021. – File photo
NEW DELHI (Feb 23): A new agriculture tax introduced by the Indian government will remove the “undue advantage” enjoyed by palm oil in the local market, according to an industry group.
India had reduced the import duty on crude palm oil (CPO) from 27.5 per cent to 15 per cent, effective Feb 2, 2021 in its Budget 2021.
However, this was offset by the newly introduced agriculture infrastructure and development cess of 17.5 per cent in the new national budget proposals, according to the Mumbai-based Solvent Extractors’ Association (SEA).
This increased the total import duty on CPO from 30.25 per cent to 35.75 per cent, said SEA president Atul Chaturvedi.
While soybean oil and sunflower oil imports are now subjected to a 20 per cent cess, their basic duty decreased from 35 per cent to 15 per cent, keeping the effective tariff unchanged at 38.5 per cent.
“The duty advantage of CPO has narrowed from 8.25 percentage points to 2.75 percentage points,” Chaturvedi said, adding that the decision “will remove the undue advantage” palm oil had over other oils competing in the Indian market.
According to the trade group, Indian edible oils consumption is projected to rise between two and three per cent per annum in the next five years due to the population and income growth, more liberal import policies, and growing fast food consumption. – Bernama