India plans to cut taxes on some edible oils to cool the domestic market after war in Ukraine and Indonesia’s ban on palm oil exports has sent prices skyrocketing, people close to the government say. case.
India, the world’s largest importer of vegetable oils, is seeking to cut agricultural infrastructure and development taxes on imports of crude palm oil by 5%, the sources said, asking not to be identified as the information are private.
The new tax amount is still under deliberation, the people said.
The tax is levied in addition to basic tax rates on certain items and is used to fund agricultural infrastructure projects. The basic import duty on crude palm oil has already been removed.
A finance ministry spokesperson did not immediately respond to calls and a text message seeking comment. The agriculture and food ministries were also not immediately available for comment.
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India is particularly vulnerable to soaring vegetable oil prices as it depends on imports for 60% of its needs. Prices, which have recovered over the past two years, extended the soar after Russia’s invasion of Ukraine stalled sunflower oil exports and Indonesia, the largest shipper of sunflower oil. edible oils, imposed a ban on palm oil exports to protect its domestic market.
India has tried to cool prices in the past, including reducing import duties on palm, soybean and sunflower oil, and limiting stocks to avoid hoarding. The success was mixed as the measures fueled expectations for higher purchases, which further drove up international prices.
The government is now considering reducing import duties on raw varieties of canola oil, olive oil, rice bran oil and palm kernel oil from 35% to 5% to help boost domestic supply, the people said.