Indian Prime Minister Narendra Modi’s government has decided to allow the import of 20 lakh metric tons of crude soybean oil each as well as crude sunflower seed oil. This is for a period of two years at a nil rate of customs duty as well as no Agricultural Infrastructure and Development Cess. As a result, consumers will receive a substantial amount of relief. In addition to the exemption of customs duties, the Agricultural Infrastructure and Development Cess will also become effective today.
The change in tariff rate quota will be effective from May 25 this year till March 31, 2024. India, which imports nearly 60 per cent of its edible oil needs, has seen prices surge this year amid a broader spike in international prices following Russia’s conflict with Ukraine that squeezed the supply of sunflower oil. Added to that was a recent ban by Indonesia to curb palm oil exports before Jakarta replaced the ban with a domestic sales quota.
This comes at a time when the proactive BJP government is making all out efforts to contain severe inflationary pressures. These efforts include controlling the soaring prices of food, fuels and crop nutrients. The BJP government has also announced tax cuts on petrol, diesel, coking coal, and raw materials for making steel over the weekend. This is part of its efforts to cool mounting inflationary pressure. According to some analysts, the cut in fuel taxes could help reduce inflation directly by around 20 basis points in June when its full impact will be visible.