The decision was aimed at bringing down the prices of edible oil in the Indian markets.
The Union Government on Monday, December 20, reduced the basic customs duty on refined palm oil from 17.5% to 12.5% till March 2022, with effect from December 21 as part of the measures it is taking to bring down the prices of edible oil in the Indian markets.
With this duty cut, net effective duty comes down to 13.75% against 19.25% earlier, according to industry players.
Besides, the Union Government on Monday extended the "free" import policy for different kinds of palm oils till the end of 2022. These palm oils include refined bleached deodorized palm oil, refined bleached deodorized palm olein, and another variant (palm oil and its fractions, whether or not refined, but not chemically modified).
The free imports, however, are not permitted through any port in Kerala, the Union Ministry of Commerce and Industry said in a notification.
Additionally, to check inflationary pressure, India on Monday suspended trade in futures contracts of some agricultural commodities for one year. As per a Ministry of Finance notification, these agri commodities include wheat, paddy (non-basmati), chana, mustard seeds and its derivatives, soya bean and its derivatives, crude palm oil, and moong.
Macro-data, released earlier this month, showed that higher prices of commodities, food items and fuels lifted India's consumer and wholesale inflation gauges for the month of November.
According to data, Consumer Price Index (CPI) inflation jumped to three-months high of 4.9% which was led by higher core inflation.
Similarly, the annual rate of inflation, based on wholesale prices, rose to a new record high of 14.23% last month from 12.54% in October.
India is a major importer of edible oils, especially palm oil derivatives. Malaysia and Indonesia, the two largest producers of oil palm, are the suppliers of the commodity to India.