Indian vegetable oil importers await details of US trade deal
Indian importers await details of the proposed India–US trade deal that may cut tariffs on American soybean oil. With current duties near 16.5%, a 0–15% reduction or a 200,000–250,000 ton quota is discussed. However, higher US logistics costs and strong biofuel demand may limit competitiveness against South American supplies.
Indian vegetable oil importers are awaiting further clarity regarding the recently announced trade agreement between India and the United States, which envisages potential tariff reductions on a number of American goods, particularly soybean oil imports. Currently, the market has received only a general framework, while specific parameters have not yet been released.
According to preliminary information, India may reduce tariffs on American soybean oil and other agricultural products, while the United States may reduce part of the mutual tariffs imposed in 2025 from 50% to 18%. Meanwhile, the current tariff rate on imported crude vegetable oils in India is approximately 16.5%.
Market participants anticipate tariff reductions of between 0% and 15%, with the possibility of introducing a tariff quota of 200,000–250,000 tons also under discussion. This mechanism would allow only a limited volume of American soybean oil to be imported at reduced tariffs, while shipments above the quota would be subject to standard duties.
Despite potential easing of tariffs, experts doubt that American soybean oil will be able to compete with South American products due to higher logistics costs and growing demand in the US from the biofuel sector. Currently, palm oil remains the cheapest option for Indian buyers, while US soybean oil is significantly more expensive on a delivery basis.
India is the world’s largest importer of vegetable oils, with the bulk of its soybean oil coming from Argentina and Brazil. Market participants estimate that even if a quota of approximately 250,000 tons were introduced, this would only account for about 1% of the country’s annual vegetable oil consumption.
Competition could intensify further between April and July, when post-harvest soybean oil supplies from South America increase. Therefore, analysts expect the agreement’s potential impact on global trade flows to be limited and will depend on actual quota volumes, tariff levels, and U.S. export capacity.
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Source : Ukr Agro Consult
