Aimed at reining in inflation and combating soaring edible oil prices, the Center on Tuesday decided to allow import of 80 lakh tonnes (lt) of crude soybean oil and crude sunflower oil without any duty for the next two years.
The Finance Ministry issued a notification prescribing tariff rate quota under which import of a quantity of 20 lt each of crude soyabean oil and crude sunflower oil per year for two years at nil rate of customs duty and Agricultural Infrastructure and Development Cess. The import can be done in two years ie, FY 2022-23 and 2023-24.
“This will provide significant relief to consumers,” the Finance Ministry said.
This is the second set of measures announced after Road and Infrastructure Cess, a component of Central Excise Duty on petrol and diesel, was lowered on Saturday.
The Center has taken these steps at a time when retail inflation, based on the Consumer Price Index (CPI) surged to an eight-year high of 7.79 per cent in April and thewholesale price index (WPI) jumped to an all time high of 15 per cents in April.
According to official data, prices have gone up across all items from fuel to vegetables and cooking oils.
High inflation prompted the Monetary Policy Committee of the RBI to hold an off-cycle meeting to raise the benchmark interest rate by 40 basis points to 4.40 per cent earlier this month
Government has already abolished the basic import duty on crude palm oil, crude soy and crude sunflower oil, but continues with the 5 per cent AIDC on these three grades of edible oils. It has been a challenge for the government 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.
India is dependent on imports to meet two-thirds of its edible oil needs and a sharp drop in the supplies of sunflower from the Black Sea region has further stoked local prices. India imports palm oil mainly from Indonesia and Malaysia, while other oils, such as soy and sunflower, come from Argentina, Brazil, Ukraine and Russia.
India’s palm oil imports in June are unlikely to spike despite Indonesia’s decision to lift its ban on overseas shipments
May 24, 2022