Source: Ukragroconsult (Ukraine)
The Indian vegetable oil sector has appealed to the government to widen the import tariff gap between crude and refined oils as a measure to restrict imports and bolster the country’s domestic oil refining capabilities.
The Solvent Extractors’ Association of India (SEA) highlighted in a communication to Food Minister Pralhad Joshi that vegetable oil manufacturers have made significant investments in port-based extraction facilities to process imported crude oils, thereby generating employment opportunities. However, the rising influx of refined oil imports is adversely impacting India’s economic interests.
SEA pointed out that suppliers from Indonesia and Malaysia predominantly export refined oils rather than crude, resulting in underutilized capacity at Indian refining plants. The association emphasized that the current tariff disparity between crude palm oil and its refined counterpart is insufficient to deter the increasing volume of refined oil imports. They recommended that the government either hike tariffs on refined oils or lower them on crude palm oil. To date, the authorities have not addressed this request.
In September 2024, India introduced a basic customs duty of 20% on both crude and refined vegetable oils. Subsequently, the effective import duties rose to 27.5% for crude oils and 35.75% for refined oils.
Previously, data revealed that in April, palm oil’s share in India’s total vegetable oil imports declined to 43%, down from 61% the previous year, whereas the proportion of soybean and sunflower oils increased to 57%. India sources almost two-thirds of its vegetable oil needs through imports, primarily obtaining palm oil from Indonesia, Malaysia, and Thailand, while Argentina, Brazil, Russia, and Ukraine supply soybean and sunflower oils.