Commerce ministry recommends 5% hike in duty on certain palm oil imports from Malaysia

NEW DELHI: The commerce and industry ministry has recommended raising the safeguard duty on certain refined palm oil imports from Malaysia by 5% to curb cheaper purchases of the product.

The ministry's investigation arm Directorate General of Trade Remedies has recommended the duty after conducting a probe into alleged jump in imports of “refined bleached deodorised palmolein and refined bleached deodorised palm oil” from Malaysia, following a complaint from Solvent Extractors' Association of India (SEA).

“This has been done to safeguard the interest of domestic industry. It will help limit import of palm oil from Malaysia, thereby benefiting our farmers directly,” the ministry said in a statement on Monday.


India currently imposes a 40% import duty on crude palm oil and 50% on refined palm oils. However, shipments of refined palm oils from Malaysia have since January been levied a 45% duty under the Comprehensive Economic Cooperation Agreement (CECA) with Malaysia, leading to a surge in refined palm imports in the first seven months of 2019 and causing serious injury to domestic producers.

Imports from Malaysia increased from 6,26,362 MT in 2016-17 to 25,96,225 MT in Jan-June, 2019 thus showing an increase of 314%. Imports from other countries declined from 23,15,292 MT in 2016-17 to 7,25,210 MT in Jan-June, 2019.

Palm oil is used by several industries in food products, detergents and cosmetics, among others.

The ministry has recommended raising the duty for six months.

Stating that it is “noteworthy that import of “Refined Bleached Deodorised Palmolein and Refined Bleached Deodorised Palm Oil” into India from Malaysia under the CECA has been under investigation, the ministry said: “The recent step will have positive impact on domestic industries using palm oil, while giving a boost to palm growers.”