Centre scraps import duties on crude sunflower and soybean oils

Centre scraps import duties on crude sunflower and soybean oils

News: In a bid to cool inflation, the Centre allowed duty free import of 20 lakh tonnes each of crude soybean oil and crude sunflower oil for this year as well as 2023-24.

About:
• More than half of India’s edible oil consumption is imported
• India’s dependence on edible oil imports is to the tune of 65%.
• Sunflower oil accounts for 14% of all edible oil imports
• India imports edible oils majorly from Ukraine and 20% from Russia (about 70%)
• India imports palm oil from Indonesia and Malaysia, while Soybean oil comes from Brazil and Argentina.
• In 2019, edible oils accounted for 40% of agriculture import bills and 3% of overall import bill of the country.
• Palm Oil (62%) > Soya oil (21%) > Sunflower oil (16%)

What is inflation?
• Inflation is defined as a situation where there is sustained, unchecked increase in the general price level and a fall in the purchasing power of money.
• The reason for price rise can be classified under two main heads which is Increase in Demand and Reduced supply.
• In India, inflation is primarily measured by two main indices - WPI and CPI.
• The CPI calculates the difference in the price of commodities and services such as food, medical care, education, electronics which Indian consumers buy for use.
• The goods or services sold by businesses to smaller businesses for selling further are captured by the WPI.
• In India, both WPI (Wholesale Price Index) and CPI (Consumer Price Index) are used to measure inflation.
• RBI through its Monetary Policy Committee Controls Inflation with its tools to control Money supply in the market.

What is import duty?
• It is a tax collected on imports and some exports by the customs authorities of the country.
• It is based on the value of goods that are imported.
• Import duty may also be referred to as tariff, import tax, customs duty and import tariff.
• The purpose of import duty is to raise income for local governments and to give market advantage to locally grown or produced goods that are not subject to import duties.
•  It is sometimes used as a tool to penalize a particular nation by charging high import duties on its products.