The government on Wednesday imposed 2.5% import duty on crude edible oil to protect domestic farmers, but kept duties unchanged on refined cooking oil fearing a hike in retail prices.
The decision was taken at the meeting of Cabinet Committee on Economic Affairs (CCEA) held in New Delhi, a source said.
At present, crude edible oil attracts no import duty but there is 7.5% duty on refined edible oil.
India imports about half of total domestic requirement of cooking oil. In 2011-12 oil year (November-October), the total import of vegetables oils (edible and non-edible oil) was an all-time high of 10.19 million tonnes. In the first two months of the current oil year, imports are up by 5%.
The agriculture ministry had proposed an increase in the duty on crude edible oil to protect the interest of palm growers, particularly from Andhra Pradesh.
Earlier this week, agriculture minister Sharad Pawar, finance minister Pranab Mukherjee and food minister KV Thomas reviewed the edible oil imports and discussed the issue of raising the duty on edible oil.
Agriculture ministry wanted to an import duty crude edible oil to be 7.5%, 15% on refined oil. But during the inter-ministerial meeting, the finance ministry felt such a sharp rise would lead to rise in inflation.