The exemption of basic customs duty and agriculture infrastructure and development cess on the imports of crude soya bean and sunflower oils till June 30, 2023, is a significant move by the Indian government to ease the pressure on domestic edible oil prices. The decision has been taken in view of the rising demand for edible oils and the limited domestic supply, which has resulted in an increase in their prices.
India is the largest importer of edible oils in the world, with over 15 million tonnes of edible oil imported in 2020-21. The country relies heavily on imports of edible oils, as domestic production of oilseeds and edible oils has not kept pace with the rising demand. The COVID-19 pandemic has also affected the supply chain of edible oils, leading to a further rise in prices.
The exemption of basic customs duty and agriculture infrastructure and development cess will make the import of crude soya bean and sunflower oils cheaper and more accessible, which will help meet the demand for edible oils in the country. The decision applies only to the import of crude oils and not refined oils, which means that the government is trying to encourage domestic refining of crude oils to increase local production.
The decision is subject to certain conditions, such as imports being made under tariff rate quotas (TRQs) and the quota being filled within the specified time limit. The exemption of duties and cess will only apply up to the quota limit, after which a higher tariff rate will be applied. This is done to protect domestic oilseed growers and edible oil manufacturers from cheap imports.
The exemption of basic customs duty and agriculture infrastructure and development cess on the imports of crude soya bean and sunflower oils till June 30, 2023, is a positive step by the Indian government to alleviate the pressure on domestic edible oil prices. The move is expected to increase the availability of edible oils in the country and keep their prices affordable, benefiting consumers and the overall economy.