New Delhi: India will allow a limited quantity of duty-free imports of crude soybean and sunflower oils for two years, another step in a series of measures the country has taken to cool surging food prices.
The government will permit purchases of 2 million tons each of the two vegetable oils per annum this fiscal year and the next, according to a notification by the finance ministry. Inbound shipments under the quota won’t require any customs duty or the agriculture infrastructure and development tax, it said late on Tuesday.
The Directorate General of Foreign Trade will invite applications to allocate shipment quotas for 2022-23 from May 27, according to a separate notification by the commerce ministry. India is the world’s biggest importer of palm, soybean and sunflower oils.
Bloomberg earlier reported that the government was considering cutting the agriculture cess, an extra levy used by the government to collect funds for farm-infrastructure projects, on soy and sunflower oils from 5%.
The move is one of the limited options available for the government to reduce surging vegetable oil prices in the world’s second most-populous nation. India had earlier scrapped base import levies on most cooking oils, including palm oil and soybean oil, and imposed inventory limits to prevent hoarding.
Edible oil prices in India, which relies on imports for 60% of its needs, have surged this year along with international markets following Russia’s invasion of Ukraine that choked the supply of sunflower oil from the Black Sea region. Added to that was concern about production levels in Malaysia, and a recent surprise move by Indonesia to temporarily ban palm oil exports, before replacing it with a domestic sales quota.
India is battling to contain severe price pressures, with food, fuels and crop nutrients soaring. Wholesale inflation in India, the world’s second-most populous nation and Asia’s third-biggest economy, soared in April to the highest in more than three decades.
The administration of Prime Minister Narendra Modi announced tax cuts on gasoline, diesel, coking coal and raw materials for making steel during the weekend, and boosted its subsidy for crop nutrients to tackle high prices that have been hitting households, farmers and manufacturers. -Bloomberg