The Cabinet Committee on Economic Affairs (CCEA) is expected to consider Food Ministry's proposal soon of increasing import duty on refined edible oil to 10 percent from the current 7.5 percent in order to discourage cheaper inflows of refined oils from overseas for protecting domestic refiners and farmers. Last year, Food Ministry's proposal was rejected by the CCEA amid fears of its impact on elevated inflation.
Meanwhile, the negative inflation in edible oils for a fifth straight month in November as compared with a 6.9% headline inflation during the same period, has encouraged the government for a duty hike in edible oil. On the other hand, the agriculture ministry feels the duty structure on edible oils should be such that it maintains domestic prices in accordance with the movement of prices globally.
India imports more than a half of its annual edible oil requirements. Despite, the world's largest edible oil buyer, India impose low import duties. However, major exporters such as Indonesia and Malaysia offer duty incentives on supplies of refined edible oils to promote their local refiners. In November, Indian refined oil imports shot up by 172% in a year to 2,08,076 tonnes, while crude oil purchases from overseas were up by only 20% at 719,035 tonnes.