The government has reduced import duty on edible oils in order to rein-in the inflating prices of kitchen items. According to a notification released by Finance Ministry, import duty on crude palm oil has been reduced by 6.5% i.e.. from 2.5% to 10%. Tariffs on crude soyaoil and crude sunflower oil have been reduced from 7.5% to 2.5%.
The effective duty, including agri-cess on the aforementioned oils, will come down to 24.75% from 30.25%. The effective duty in case of refined palm, soya, and sunflower oils will come down to 35.75% from 41.25%.
These reductions in the tariff rates are expected to pull down the retail price of edible oils by ₹4-5 per litre, according to BV Mehta. Mehta is the executive director of Solvent Extractors Association. He also said, “The current domestic bullishness in edible oils is spearheaded by low arrival of mustard seed. In our meeting with food secretary on Friday, we had suggested a reduction in import duty on rapeseed oil in line with soya and sunflower oil or even a little lower as it will have desired salutary effects on runaway mustard oil prices,”.
Why the retail price of cooking oil increased in the first place?
India imports edible oils from Malaysia, Latin American countries, Indonesia etc. India started importing cooking oils from these countries after the 1991 economic reforms. Before that, we used to depend on traditional cooking mediums such as mustard oil.
Currently, around 70% of India’s edible oil needs are fulfilled by imports. Since such a huge proportion of the commodity are imported, the retail price is affected by the volatile international market conditions. This is the sole reason why the retail price of cooking oil is so costly in India.
This decision taken by the government is expected to reduce the overall retail price of edible oils in India. Stay tuned with Artifex.News for further updates.
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