The edible oil industry on Monday welcomed the government's move to reduce duties on imported edible oils and said it may help check the rising prices.
"It is the need of the hour," Solvent Extractors Association of India Executive Director BV Mehta told PTI. There will be reduction of Rs 2.5-3 per kg in the prices of palm oil and Rs 5-7 in refined soya oil at the current international prices, he said.
Mehta said it is good that government has maintained the difference in duties between crude and refined, so that the industry will continue to import crude edible oil, refine it here and supply in the domestic market.
All edible oils in crude form can be imported at zero duty, while the duty on oils in the refined form would attract 7.5 per cent. The decisions were taken at a meeting of the Cabinet Committee on Prices at Prime Minister Manmohan Singh's official residence on Monday night.
These decisions will come into effect from midnight on Monday, but a notification will be issued on Tuesday. The government has also reduced duty on Vanaspati, the vegetable oil mostly consumed by hotels and restaurants, to 7.5 per cent from 20 per cent.
It has cut import duty on butter and clarified butter (ghee) from 40 per cent to 30 per cent. The government, on March 20, had reduced import duty on most of the edible oils in crude form except soya oil to 20 per cent and refined oil to 27.5 per cent. Earlier, the duty on soyaoil was 40 per cent.
India imports about half of its edible oil requirement. The palm oils are imported from Malaysia and Indonesia, while soyabean oil from Brazil and Argentina.