U.S. Markets open in 50 mins

India raises import tax on crude palm oil to 44%

FILE PHOTO: A worker unloads palm oil fruits from a lorry inside a palm oil factory in Salak Tinggi, outside Kuala Lumpur, Malaysia

MUMBAI (Reuters) - India has raised import tax on crude palm oil to 44% from 37.5%, a government notification said on Saturday, as the world's biggest palm oil importer tries to boost local oilseed production.

The notification confused traders as on Dec. 31, India cut import tax on crude palm oil imported from Southeast Asian (ASEAN) countries to 37.5% from 40%, said the Solvent Extractors' Association (SEA), a trade body.

"The budget notification says import duty is 44%. However, if you import under ASEAN agreement, the concessional duty rate of 37.5% would be applicable," said Sandeep Bajoria, chief executive of the Sunvin Group, a Mumbai-based vegetable oil importer.

India primarily imports palm oil from Indonesia and Malaysia, which are members of the ASEAN group, refiners said.

Last month, India restricted imports of refined palm oil and asked importers to avoid purchases from Malaysia after its criticism of India's actions in Kashmir and a new citizenship law.

India relies on imports for 70 percent of its edible oil consumption, up from 44 percent in 2001/02. Palm oil accounts for nearly two-thirds of India's edible oil imports of around 15 million tonnes, according to data compiled by SEA.


(Reporting by Rajendra Jadhav; Editing by Shri Navaratnam and Angus MacSwan)