Sharp import duty hike likely to impact margins of consumer majors

Some corporates may prefer to cut margins and absorb some impact to avoid hurting demand

A sharp import duty hike on edible oils -- palm, sunflower, and soy -- will significantly impact FMCG businesses. The hike is to the tune of 22 per cent. The duty has been raised from 5.5 per cent on crude oils to 27.5 per cent while that for refined oils is up from 13.75 per cent to 35.75 per cent. 

Around 95 per cent of palm and sunflower oil requirements are imported and around 70 per cent of soybean oil is also imported.

Overall, India meets 60-70 per cent of its vegetable oil demand through imports. Palm,