Rising import duty may increase price of cooking oil
Ahead of the festive season, the government is caught in a wrath in balancing consumers\' interest with the welfare of farmers who would like more protection by way of increased import duty that may raise the risk of retail inflation.
New Delhi: Ahead of the festive season, the government is caught in a wrath in balancing consumers' interest with the welfare of farmers
who would like more protection by way of increased import duty that may raise the risk of retail inflation.
As per an ASSOCHAM study, India's import bill on account of vegetable oils is going to increase to USD 14 billion in the current financial
year, against USD 10 billion in 2014-15.
"Due to weak global prices and glut in the international markets, prices in India have remained subdued despite a severe shortage of
domestic production. For the September, the CPI (consumer price index) marked annualized increase of only 3.6 percent in the Oils and
Fats segment," stated the study.
So far, the government has raised the customs duty on crude and refined edible oils to 12.5 percent and 20 percent respectively. While
there is a demand for more such protection for the farmers, the move may lead to spiral in consumer inflation, which the government can
ill-afford, learning from the pulses experience.
"A major concern for the policy planners involved in ensuring the domestic availability of edible oils is the fact that domestic prices of
oilseeds and vegetable oils are too un-remunerative to enthuse farmers for intensive oilseeds cultivation. That, in a way, is also coming
in the way of the Prime Minister Narendra Modi's ambition of making India self-sufficient in the area of edible oils, "ASSOCHAM Secretary
General D S Rawat said.