Indian Oil Industry Calls for Tariff Reforms to Limit Imports

The Solvent Extractors’ Association of India (SEA) has urged the government to review the existing tariff rates on the import of vegetable oils to support domestic production and curb the rising import of refined varieties. According to industry representatives, increasing the tariff differential between crude and refined oils will better protect Indian processing capacities, which have significantly invested in developing facilities for processing imported crude oil.

This is reported by AgroReview

Changes in Tariffs and Their Impact on the Market

SEA speakers noted that suppliers from Indonesia and Malaysia are increasingly exporting refined oils, which reduces the load on Indian factories and harms the country’s economic interests. In a letter to Food Minister Pralhad Joshi, they emphasized that the existing tariff gap between crude palm oil and refined varieties is insufficient to curb the growing import of processed oils.

According to the association, the government should either raise tariffs on refined varieties or lower them on crude palm oils to balance the market and protect domestic producers. Currently, the authorities have not responded to this call.

Import Trends and Market Consequences

In September 2024, India imposed a basic duty of 20% on all vegetable oils, regardless of their type. As a result, crude oils are taxed at 27.5%, while the import of refined varieties is taxed at 35.75%. This has caused a shift in the import structure: the share of palm oil decreased from 61% to 43% in April 2025, while the share of soybean and sunflower oil increased to 57%.

India remains one of the largest importers of vegetable oil, meeting nearly two-thirds of its domestic demand. The main suppliers are Indonesia, Malaysia, and Thailand for palm oil, while Argentina, Brazil, Russia, and Ukraine supply soybean and sunflower oil.