INDIA is considering a proposal to increase import taxes on the refined variety of palm oil to boost local processing and cut overseas purchase, reports The Edge.

The move is expected to add more pressure on exports from Malaysia to India, which is currently the world’s biggest buyer of palm oil.

New Delhi is looking at imposing a new levy on top of the existing import duty and raise the goods and services tax on the processed tropical oil, said Bloomberg.

A Finance Ministry spokesman Rajesh Malhotra declined to comment on the matter.

The move if implemented could reduce refined palm shipments from top producers Indonesia and Malaysia.

Malaysia’ exports are already under pressure after India’s top vegetable oil trade body, Solvent Extractors’ Association of India (SEAI), urged its members to stop importing crude palm oil from Malaysia.

The decision was in response to Prime Minister Dr Mahathir Mohamad’s recent comments on India’s policies towards Kashmir after Indian Prime Minister Narendra Modi stripped the restive region’s autonomy and arrested its leaders.

Dr Mahathir said India “invaded and occupied” Kashmir and called on the South Asian nation to work with Pakistan to resolve tensions in the region.  

Following Dr Mahathir’s comments, SEAI urged its members “to avoid purchases from Malaysia for the time being”.

India imported 2.5 million tonnes compared to second biggest importer, China’s 1.86 million tonnes.

In 2018, Malaysia exported a total 16.5 million tonnes of palm oil products worth RM44.7 billion, Malaysian External Trade Development Corporation said in a statement.

The Malaysian Palm Oil Association has also appealed to the SEAI to reconsider its call to ban Malaysian CPO. – October 30, 2019.