In an effort to bring down food inflation, the Indian government has allowed limited imports of certain commodities under the tariff-rate quota (TRQ) system, where importers pay nil or lower duty.
The commodities included in the duty concessions are corn, crude sunflower oil, refined rapeseed oil, and milk powder. Specifically, India has allowed the import of:
150,000 metric tons of sunflower oil or safflower oil
500,000 tons of corn
10,000 tons of milk powder
150,000 tons of refined rapeseed oil
India is the world’s biggest importer of vegetable oils, such as palm oil, soyoil, and sunflower oil, as well as the top producer of milk. The move is aimed at addressing food inflation, which has remained around 8% year-on-year since November 2023, preventing the government from cutting interest rates.
The government has shortlisted cooperatives and state-run companies, such as the National Dairy Development Board (NDDB), the National Cooperative Dairy Federation (NCDF), and the National Agricultural Cooperative Marketing Federation of India Ltd (NAFED), to handle the imports.
However, a Mumbai-based dealer with a global trade house expressed concern that the duty-free imports of sunflower and rapeseed oil could exert additional pressure on oilseed prices, which are already under pressure due to cheaper imports that still attract duty.
India fulfills nearly two-thirds of its vegetable oil requirements through imports, mainly from Indonesia, Malaysia, Russia, Ukraine, Argentina, and Brazil. Domestic corn prices have also been rising due to strong demand from the poultry and ethanol industry.
The government has strict rules in place to ensure that imports contain no trace of genetically modified organisms, as India does not allow the cultivation of any genetically modified food crops.