IVPA urges Govt to increase duty differential on crude and refined edible oils to 20%
The Indian Vegetable Oil Producers’ Association (IVPA) has urged the government to raise the net duty differential between crude and refined edible oils to 20% from 8.25%. This aims to counter rising refined oil imports, protect domestic refining, and promote local value addition. IVPA also seeks refined oils to be placed on the ‘Restricted List’ to curb excessive imports.
Indian Vegetable Oil Producers’ Association (IVPA) has urged the Government to raise the net effective duty differential between crude and refined edible oils to 20 per cent from the current 8.25 per cent.
According to IVPA, the existing differential is being effectively nullified due to higher export levies and taxes imposed by exporting countries on crude palm oil (CPO), while refined palm oil and its derivatives are subsided by way of lower export duties than CPO. This has led to an influx of refined palm oils there by leading to underutilisation of India’s refining capacity in the refining and allied sectors.
IVPA said India imported 8.24 lakh tonnes (lt) of RBD palmolein between October 2024 and February 2025, up 80 per cent from 4.58 lt imported between June and September 2024. Imports of refined palm oil surged from 4.58 lt (accounting for 14 per cent of total palm oil imports) during June-September 2024 to 8.24 lt (representing about 29 per cent of total palm oil imports) in the period October 2024 to February 2025.
Destabilsing effect
A media statement by IVPA said the imports of refined products at about ₹1-2 per litre helped only the traders and the distribution channel but the benefit to the consumers is almost negligible. However, it has huge destabilising effect on the industry negatively affecting the capacity utilisation in the country.
By levying high export duties and taxes on CPO and imposing lower or zero duties on refined palm olein (RPO), palm oil exporting countries are incentivising the export of finished goods and discouraging value addition in India, the statement said, adding, higher domestic refining will result in greater availability of by-products such as PFAD and palm stearin, increased raw material supply for ancillary sectors such as bakery, oleochemicals, soap industry, etc.
Currently, refined edible oils are exempt from the Agriculture Infrastructure and Development Cess (AIDC), while a 5 per cent AIDC is applied to crude edible oils, effectively narrowing the duty differential to from 12.5 per cent to just 8.25 per cent.
Place import under restricted list
IVPA recommended levying a 10-15 per cent AIDC on refined oils to ensure a level-playing field and encourage domestic refining and processing of CPO.
The association has also requested the Government to place refined edible oils under the ‘Restricted List’ as done in the past when such a surge in finished product was witnessed. Such a move would help regulate the import volumes of refined products, it said.
Such policy corrections will result in a healthy refining sector which supports consistent oilseed demand and fair farm-gate prices, secures thousands of direct and indirect jobs in this ₹3 lakh crore industry, the statement added.
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Source : The Hindu Business line
