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India Cuts Tax on Palm Oil Imports

India has reduced tax on the imports of crude palm oil (CPO), from 7.5% to 5%, as the world’s largest edible oil importing country aims to curb local goods prices along with assisting local consumers and refiners.

Tax cut will help to remove the widening gap between the CPO and refined palm oil import tariff. It will also reduce the prices for the refiners in India to import CPO, according to the industry authorities.

This measure was fulfilled as of Sunday.

BV Mehta, Executive Director of the Solvent Extractors' Association (SEA), said the cut in the Agriculture Infrastructure and Development Cess (AIDC) would broaden the import tax between CPO and refined palm oil to 8.25%.

He added it will benefit the refiners in India and the government will still have to create a further difference, to 11%, to support domestic refiners. The previous government’s notice said the Indian government would keep on reducing customs duty on edible oils until the end of September. The tax cut was supposed to end at the end of March.

India, facing a challenge to make increasing prices in the upcoming months, imports the greatest amount of its edible oil. Indonesia and Malaysia are the major exporters of palm oil to the country; soy and sunflower oils are imported from Argentina, Brazil, Ukraine and Russia.

Sandeep Bajoria, CEO of Sunvin Group, said refined palm oil imports rounded up approximately half of the country’s palm oil imports over the last few months.

He added reforms in tax framework could bring down the share of refined palm oil to 20%. 

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By Saha on February 14, 2022


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