The Centre on late Monday reduced the basic customs duty on refined palm oil from 17.5 per cent to 12.5 per cent till March 2022, with effect from Tuesday, as part of the measures it is taking to bring down edible oil rates in the Indian markets.
With this duty cut, net effective duty comes down to 13.75 per cent agaist 19.25 per cent earlier, according to industry players.
Besides, the Centre on Monday extended the "free" import policy for different kinds of palm oils till the end of 2022. These palm oils include refined bleached deodorised palm oil, refined bleached deodorised palmolein, 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 Ministry of Commerce and Industry said in a notification on Monday.
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 November consumer and wholesale inflation gauges.
According to data, CPI inflation jumped to three-months high of 4.9 per cent 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 per cent last month from 12.54 per cent 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.