India cuts tax on palm oil imports from ASEAN countries

India has cut import taxes on crude and refined palm oil from Association of South East Asian Nations (ASEAN) countries after a request from suppliers, a government notification said.

The reduction will lead to higher imports of palm oil by the world’s biggest edible oil buyer in coming months as it would narrow the difference between the tropical vegetable oil and competitors such as soyaoil and sunflower oil.

The duty on crude palm oil was lowered to 40 per cent from 44 per cent, while the tax on the refined variety was cut to 50 per cent from 54 per cent, according to the notification issued early this week.

Malaysian shipments of refined palm oil will be taxed at 45 per cent compared with 54 per cent earlier, the government said in a separate notice.

In March 2018, India raised the import tax on crude palm oil to 44 per cent from 30 per cent and lifted the tax on refined palm oil to 54 per cent from 40 per cent.

Palm oil has become more competitive due to the duty reduction and this will lead to higher imports from January onwards.

India imports palm oil from Indonesia and Malaysia and soyaoil from Argentina and Brazil. It also buys small volumes of sunflower oil from Ukraine and canola oil from Canada.

Its palm oil imports dropped 6.4 per cent from a year ago to 8.7 million tonnes in the 2017/18 marketing year ended in October, according to Solvent Extractors’ Association (SEA) of India.

India relies on imports for 70 per cent of its edible oil consumption, up from 44 per cent in 2001/02.

Traditionally, Indonesia corners the bulk of India’s palm oil market. It is expected the duty reduction will now allow Malaysia to raise its share.

Shekhar Ghosh is consulting editor, He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at

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