India permits limited imports of corn, vegetable oils at concessional duty

India has set import limits at 150,000 metric tonnes for sunflower or safflower oil, 500,000 tonnes for corn, 10,000 tonnes for milk powder, and 150,000 tonnes for refined rapeseed oil

India on Wednesday approved limited imports of corn, crude sunflower oil, refined rapeseed oil, and milk powder under the tariff-rate quota (TRQ) system, allowing importers to benefit from zero or reduced duties.

This measure is part of New Delhi’s efforts to curb food inflation.

India, the largest global importer of vegetable oils including palm oil, soyoil, and sunflower oil, and a leading milk producer, has set import limits at 150,000 metric tonnes for sunflower or safflower oil, 500,000 tonnes for corn, 10,000 tonnes for milk powder, and 150,000 tonnes for refined rapeseed oil.

Food inflation, driven by factors such as adverse weather conditions affecting crop yields, has been steady at around 8 per cent year-on-year since November 2023. This persistent inflation has hindered efforts to reduce interest rates.

 

The government has selected cooperatives and state-owned entities, including the National Dairy Development Board (NDDB), the National Cooperative Dairy Federation (NCDF), and the National Agricultural Cooperative Marketing Federation of India Ltd (NAFED), to handle the imports.

A Mumbai-based importer said, there was no need for the government to allow imports of sunflower and rapeseed oil at a concessional duty. “Oilseed prices are already under pressure due to cheaper imports, which still attract duty. Now, duty-free imports will exert additional pressure,” the dealer said.

Vegetable demand met through imports

India meets nearly 60 per cent of its vegetable oil demand through imports, primarily sourcing palm oil from Indonesia and Malaysia, alongside sunflower oil and soybean oil from Russia, Ukraine, Argentina, and Brazil.

Despite being the largest global producer of milk, India’s major dairies recently increased prices of milk and milk products due to high consumer demand amid constrained supply. Rising domestic corn prices reflect robust demand from the poultry and ethanol sectors.

India prohibits the cultivation of genetically modified food crops and mandates strict regulations to ensure imported products are free from genetically modified organisms (GMOs).

[With agency inputs]