India Announces Tariff-Rate Quotas to Mitigate Rising Food Inflation
Source: The DairyNews
The Indian government has announced a series of measures to permit limited imports of key agricultural commodities under tariff-rate quotas (TRQs) in an effort to curb rising food inflation. The decision, disclosed on Wednesday, allows the import of specific quantities of corn, crude sunflower oil, refined rapeseed oil, and milk powder at reduced or zero duty rates.
Under the new policy, India will permit the import of 500,000 metric tons of corn, 150,000 metric tons of sunflower or safflower oil, 150,000 metric tons of refined rapeseed oil, and 10,000 metric tons of milk powder.
This move addresses persistent food inflation in India, which has remained at approximately 8% year-on-year since November 2023, complicating efforts to lower interest rates.
Sel ect cooperatives and state-run entities, including the National Dairy Development Board (NDDB), National Cooperative Dairy Federation (NCDF), and National Agricultural Cooperative Marketing Federation of India Ltd (NAFED), have been designated to handle these imports. India, the world's largest importer of vegetable oils and leading milk producer, typically sources nearly two-thirds of its vegetable oil requirements fr om countries such as Indonesia, Malaysia, Russia, Ukraine, Argentina, and Brazil.
Supply-side challenges, including adverse weather conditions affecting crop yields, have exacerbated the situation. The decision has sparked mixed reactions within the industry. A Mumbai-based dealer associated with a global trade house voiced concerns, stating, "There wasn't any need to allow imports of sunflower and rapeseed oil at concessional duty. Oilseed prices are already under pressure due to cheaper imports, which still attract duty. Now, duty-free imports will exert additional pressure."
Recent months have seen leading dairies in India raise prices for milk and milk products due to strong demand and limited supplies. Similarly, domestic corn prices have been rising, driven by demand from the poultry and ethanol sectors.
India maintains strict regulations regarding genetically modified organisms (GMOs) in food crops, prohibiting the cultivation of GM food crops and ensuring imports are free from GMO traces.
This move addresses persistent food inflation in India, which has remained at approximately 8% year-on-year since November 2023, complicating efforts to lower interest rates.
Sel ect cooperatives and state-run entities, including the National Dairy Development Board (NDDB), National Cooperative Dairy Federation (NCDF), and National Agricultural Cooperative Marketing Federation of India Ltd (NAFED), have been designated to handle these imports. India, the world's largest importer of vegetable oils and leading milk producer, typically sources nearly two-thirds of its vegetable oil requirements fr om countries such as Indonesia, Malaysia, Russia, Ukraine, Argentina, and Brazil.
Supply-side challenges, including adverse weather conditions affecting crop yields, have exacerbated the situation. The decision has sparked mixed reactions within the industry. A Mumbai-based dealer associated with a global trade house voiced concerns, stating, "There wasn't any need to allow imports of sunflower and rapeseed oil at concessional duty. Oilseed prices are already under pressure due to cheaper imports, which still attract duty. Now, duty-free imports will exert additional pressure."
Recent months have seen leading dairies in India raise prices for milk and milk products due to strong demand and limited supplies. Similarly, domestic corn prices have been rising, driven by demand from the poultry and ethanol sectors.
India maintains strict regulations regarding genetically modified organisms (GMOs) in food crops, prohibiting the cultivation of GM food crops and ensuring imports are free from GMO traces.
