India Evaluates Increasing Edible Oil Import Duties To Aid Domestic Farmers

India is considering increasing import duties on edible oils following requests from the domestic vegetable oil industry, as the government weighs measures to support local farmers and reduce pressure on foreign-exchange reserves. The proposal comes amid broader efforts by the Centre to curb imports of major commodities and stabilise the weakening rupee.

According to sources familiar with the discussions, the government is examining whether higher import taxes on edible oils would help domestic oilseed farmers secure better prices for their produce. No final decision has been taken so far, but deliberations are ongoing at multiple levels within the government and industry.

India is the world’s largest importer of edible oils and depends on overseas supplies for nearly 60 per cent of its domestic consumption. The country imports large quantities of crude palm oil, soybean oil and sunflower oil, making it highly vulnerable to fluctuations in global prices and currency movements.The discussions come at a time when the Indian rupee has emerged as one of Asia’s weakest-performing currencies this year, increasing the cost of imports.

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Earlier this month, Prime Minister Narendra Modi urged citizens and industries to reduce dependence on imported commodities such as edible oils, crude oil, fertilisers and gold in an effort to contain foreign-exchange outflows.Global edible oil prices have also surged in recent weeks due to geopolitical tensions in West Asia and disruptions in supply chains.

A United Nations index tracking global food commodity prices recently climbed to its highest level in more than three years, driven largely by rising vegetable oil, cereal and meat prices. Palm oil prices alone have reportedly increased by around 12 per cent since the conflict began, with major producers Indonesia and Malaysia expanding biofuel production amid elevated energy costs.

India had reduced the basic import duty on crude palm, soybean and sunflower oils from 20 per cent to 10 per cent last year to control domestic inflation and support local processors. The government had also directed companies to pass on the benefits of lower duties to consumers. However, industry representatives now argue that higher duties may be necessary to protect domestic farmers from falling oilseed prices and increasing competition from cheaper imports.

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