India has authorised duty-free imports of 2 million tonnes each of crude soyoil and crude sunflower oil for the current and following fiscal years, till March 2024, according to a government directive issued on Tuesday.

As the world’s largest vegetable oil importer strives to control food inflation, trade and government officials previously stated India could reduce an import tariff on crude soyoil and crude sunflower oil.

Traders must apply to the government for an import quota.

India, the world’s largest importer of edible oils, has previously eliminated the basic import duty on crude palm oil, crude soyoil, and crude sunflower oil, but retained a 5% Agriculture Infrastructure and Development Cess (AIDC) on these three grades.

The Solvent Extractors’ Association of India, a trade group, had asked the government to consider lowering or eliminating the 5% AIDC on crude palm oil.

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In recent months, New Delhi has struggled to manage a rise in local edible oil costs, and Russia’s invasion of Ukraine has made taming vegetable oil prices even more difficult.

India imports more than two-thirds of its edible oil, and there has been a significant decrease in supplies.

Around 60% of the world’s sunflower oil production and 76 percent of exports come from the Black Sea, while Argentina, Brazil, and the United States are India’s main soyoil suppliers.

India’s sunflower oil

Even as palm oil exports declined due to leading exporter Indonesia’s decision to limit outside sales, India has been attempting to increase soyoil imports.

“India’s soyoil imports will increase in the coming months, but sunoil imports are unlikely to increase due to limited stockpiles in Russia and Argentina,” a Mumbai-based dealer with a global trading firm said.