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Agriculture Ministry proposes import duty hike on edible oil

11 Dec 2014 Evaluate

The agriculture ministry has moved a Cabinet proposal to increase import duty on edible oil to protect the interest of domestic farmers and processors. The agriculture ministry has proposed increase in import duty of refined edible oil to 12.5 percent from the existing 10 percent, while the food ministry has recommended the hike should be to 15 percent. On crude edible oil, both the ministries have proposed import duty should be increased to 5 percent from the current 2.5 percent. The food ministry favored maintaining a duty differential between crude and refined edible oils at 10 percentage points, while the agriculture ministry wants it to be at 7.5 percentage points.

India’s vegetable oil imports rose 12 percent to all-time high of 11.82 million tonnes in the 2013-14 marketing year-ended October, on rise in domestic consumption and low rates of cooking oils. The country imports about 60 percent of the annual domestic demand of vegetable oils (comprising edible and non-edible oils) of about 19 million tonnes.

In October, Food Minister Paswan had met Finance Minister Arun Jaitley to discuss the issue of raising import duty on crude and refined edible oils to restrict cheap imports. Industry body Solvent Extractors' Association has been demanding to increase the import duty on edible oils to protect the domestic oilseeds processors.

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