India's Trade Policy in respect of Edible Vegetable Oils
1. Agricultural Trade Policy Division,
Dept of Agriculture, Cooperation & Farmers Welfare,
Government of India
2. India is a net exporter of agricultural produce.
India’s share in global agri-exports increased
from 0.8 per cent in 1990 to 2.3 per cent in 2016.
India’s total agricultural trade during 2017-18 was
Rs. 4,02,333 crores.
Exports - Rs. 2.50 lakh crores during 2017-18
(12.5 % of India’s total exports).
Imports - Rs. 1.52 lakh crores during 2017-18
(5.1% of India’s total imports).
6. India’s major items of agricultural imports during 2017-18 are
(in Rs crores):
Vegetable oils - 74,996
Pulses - 18,748
Fresh fruits – 12,525
Cashew nut – 9,134
Wheat – 2,358
Sugar – 6,036 (India is a net exporter)
Cotton raw – 6,306 (India is a net exporter)
Spices – 6,378 (India is a net exporter)
9. Sl No Top Items Top 3 Import Sources
1 Vegetable Oils 1. Indonesia (39%) 2. Argentina (21%) 3. Malaysia (18%)
2 Pulses 1. Canada (27%) 2. Australia (22%) 3. Myanmar (19%)
3 Fresh Fruits 1. USA (39%) 2. Afganistan (10%) 3. China (9%)
4 Cashewnut
1. Coted D'ivoire (24%) 2. Tanzania (12%) 3. Guinea
Bissau (16%)
5 Sugar 1. Brazil (99.4%) 2. USA (0.02%) 3. France (0.01%)
6 Cotton 1. USA (31%) 2. Australia (30%) 3. Mali (6%)
7 Wheat 1. Ukrain (48%) 2. Australia (41%) 3. Bulgaria (5%)
8 Spices
1. Vietnam (15%) 2. Afghanistan (12%) 3. Indonesia
(11%)
9 Coffee 1. Vietnam (59%) 2. Indonesia (15%) 3. Uganda (15%)
10
Fruits/Vegetable
Seeds
1. Thailand (21%) 2. Egypt (13%) 3. Chile (12%)
10. Average Bound duty for agriculture products 113 %
and average applied duty is 32.7 %.
India has a high degree of flexibility in import tariff on
Agriculture items (FTA limitations exist).
Major policy interventions are: Import Tariff, MEP,
MIP, QR, Packaging restrictions
PP&Q restrictions also exist.
11. Source: DGFT & DoR
Important Items Current Applied Duty
Wheat 20% (w.e.f. 08th Nov, 2017)
Pulses Tur: 10 (w.e.f. 28th March, 2017)-(QRs of 2 Lakh/annum is
imposed on its import on 05.08.2017)
Peas: 50% (w.e.f. 08th Nov, 2017)-QRs of 1 lakh is in force
w.e.f. 25.04.2018 upto 30th June, 2018.
Lentil: 30% (w.e.f. 21st Dec, 2017)
Chana: 60% (w.e.f. 01st March, 2018)
Moong/Urad: 0% (QRs of 3 lakh MT/annum is imposed on
their import on 21.08.2017)
Oilseeds 30% except soyabean-45%
Edible Oil
Fruits/Vegetables 30% except apple-50% and plum/grapefuits-25%.
Pomegranates fresh/Lichi-15%
Items Crude Refined
Palm Oil 44% 54%
Sunflower/Mustard/Rapeseed Oil 25% 35%
Remaining edible oil 30% 35%
12. India is heavily dependent on imports to meet its
edible oil requirements.
Total edible oil consumption in India is estimated to
be 235.5 lakh tonnes in 2016-17, out of which 140.1
lakh tonnes (60%) is imported.
Of imported edible oils during 2016-17, share of palm
oil is about 60% (83 lakh tonnes) followed by
soyabean oil with a share of 25% (35 lakh tonnes) and
sunflower oil with a share of 12% (17 lakh tonnes).
13. India is the largest imported of Edible Vegetable
Oils in the world followed by China & USA.
India’s share of world edible vegetable oil import is
about 15%.
Import growth in respect of Edible oils during the
last decade is about 174%.
16. Nine Oilseeds are the major source of vegetable oil in the
country and contributes more than 70% of domestic
availability of vegetable oils.
In addition to oilseeds crops, India has secondary sources of
edible oils like rice bran, cotton seeds, coconut, palm oil
and tree borne oilseeds that contribute about 30% of total
domestic availability of vegetable oils.
Amongst the nine major oilseeds soybean (39%),
Groundnut (24%) and Rapeseed/Mustard (24%) contribute
to 87% of total oilseeds production in the country.
In terms of vegetable oil production, Mustard, Soyabean
and Groundnut contribute 31%, 26% and 25% respectively.
20. Refined Palm oil was allowed for import with 65%
custom duty since 1994. It has been observed that
during the year 1994-2000 where there is downward
trend of custom duty from 65% to 28.6%-the CAGR for
Area & Production was -0.84% & 0.60% respectively.
From 2000-2008, when custom duty has been increased
(high duty regime), the CACR for area and production
of oilseeds was 2.30% and 7.1% respectively.
During 2008-14 where there is again downward trend of
custom duty (low duty regime), the CAGR for area and
production of oilseeds have been recorded at 0.35% and
3.39% respectively.
21. From consumer centric to farmer centric
Taking care of ‘Make in India’
Long term interests of India’s Agricultural Trade
Better coordination with various Departments &
Organizations
Regular monitoring mechanism – monitoring
mechanisms strengthened, participation in IMC
meetings of Consumer Affairs, Food.
New mechanisms are being put in place – this
committee meeting is part of this measure.
22. Measures to control Edible Oil imports (almost 50% of our agri-
imports) & Pulses (1/5th of our agri-imports)
Major revision of Agricultural Trade Policy in respect of Pulses:
Import duties increased to protect farmers, QRs placed, export
restrictions removed on 22nd November, 2017.
Major revision of Import Duties in respect of Edible Oils:
Biggest import tariff hike during the last decade. For ex: Crude
Palm Oil duty raised from 7.5% to 15% (in August, 2017) to 30%
(in November, 2017) and 44% in 1st March, 2018.
Import duty on Soyabean seeds hiked (from 30% to 45%)
Imports of Pulses reduced by 1 million MT, Import of Refined
Oils declined, Coconut oil prices appreciated, the sharp decline
in Groundnut & Mustard oil prices were arrested to a large extent
as a result of these policies, giving relief to our small & marginal
farmers.
23. Monthly meetings for monitoring Agricultural Trade with
participation of related Divisions in DAC&FW, other
Depts., & Bodies.
Strengthening Institutional mechanisms to support faster,
scientific and farmer centric Agricultural Trade Policy
Unveiling long term Agricultural Trade Policy
Collaborations & Agreements with foreign countries so as
to improve our agri-exports
Creating/supporting think tanks in Agricultural Trade Policy
Ensuring doubling of farmers incomes through appropriate
Trade Policies.