India may raise import taxes on vegetable oils to support local farmers facing low oilseed prices, potentially impacting palm oil, soy oil, and sunflower oil imports.

Vegetable Oils

According to two government sources, India is considering increasing import taxes on vegetable oils to support local farmers facing lower oilseed prices.

The move, expected to be announced in the coming weeks, could reduce demand and curb the country’s significant overseas purchases of palm oil, soy, and sunflower oil.

“We are exploring all options to help farmers. Increasing import taxes is one of the options,” said a government source, speaking on condition of anonymity by official protocols.

According to another government official who also requested anonymity, the proposal from the Ministry of Agriculture is currently under review by the Department of Revenue within the Ministry of Finance, which will make the final decision.

In 2022, India, the world’s largest importer of vegetable oils, eliminated basic import taxes on crude vegetable oils to control rising prices.

However, the government continues to impose a 5.5% Agriculture Infrastructure and Development Cess on these imports.

A government spokesperson was not immediately available for comment on the potential tax hike.

This possible policy change aims to bolster domestic oilseed prices, which have been under pressure, and ensure that Indian farmers receive better returns for their produce.

If implemented, the tax hike could significantly impact the global vegetable oil market, given India’s role as a primary importer.