The Hindu Business Line : ‘Edible oil import duty cuts, a temporary step’

New Delhi, April 1 The slew of anti-inflationary measures mostly on the fiscal front by slashing duty on crude edible oil to zero and in refined form to 7.5 per cent were a purely temporary one to shore up domestic availability of these essential oils.

Sources in the Government told Business Line here that since the country’s oilseeds production and productivity had been stagnant for several years and as the global prices of edible oil, like other commodity prices, were on the ascendant, the Government has decided to waive duty on import of crude edible oil and retain a moderate duty at 7.5 per cent on all refined edible oil imported into the country.

To a specific query as to whether this steep reduction in import of edible oil would have been taken in the run-up to forging the India-ASEAN free trade agreement, which has been stymied due to the country’s reluctance to reduce duty on palm oil and the longer phase-out period of duty cuts, the sources said that the duty cuts on edible oil announced by the Government on Monday night were only a temporary measure to tide over supply shortage and to ease domestic availability of the essential oils for consumption.

Once the supply situation gets shored up, the Government has the leeway to readjust duty levels to provide the requisite comfort factor for domestic manufacturers of oilseeds so that production and productivity would not suffer on account of cheap oils inundating the domestic market.

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