Centre Raises Import Duty on Edible Oils

GS Paper III Economy

Recently, the Centre has increased import duties on edible oils.

Background

The decision comes at a time when prices of soybean, the leading source of edible oils, are reported below the MSP.
Government Action on Soybean: The government permitted soybean procurement at MSP in Maharashtra, Madhya Pradesh, Karnataka, and Telangana.

New Duty Rates: The Ministry of Finance has raised the import duty on edible oils from 0% to 20%, with a total effective duty of 27.5%.
Reason for Change: This move aims to support domestic oil producers and increase rural employment.

Edible oils are mainly vegetable oils that are subjected to several refining processes (such as neutralisation, bleaching and deodorisation) to remove undesirable constituents.
Production: India produces about 42% of its domestic edible oil consumption requirement.
- Other Oils Production: Mustard (40%), soybean (24%) and groundnut (7%)
Imports: India is the world’s second-largest consumer and number one vegetable oil import (70%)
- Palm oil Imports from: Indonesia, Malaysia and Thailand
- soyoil and sunflower oil Imports from: Argentina, Brazil, Russia and Ukraine.

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