Consider the following statements 1 The quantity of imported edible oils is more than the domestic p...........

Economic Affairs Foreign Trade - Trends and Policy

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Consider the following statements

1.The quantity of imported edible oils is more than the domestic production of edible oils in the last five years.

2. The Government does not impose any customs duty on all imported edible oils a special case.

Which of the two statements given above is/are correct?

1 only

2 only

Both 1 and 2

Neither 1 nor 2

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Explanation:

Statement 1 is correct: India produces about 11 million tonne of edible oil but consumption is growing and stands at about 24 million tonne. the share of rural and urban consumption in total is 3.8% and 2.7%. Much of the demand comes from commercial users. For instance, most biscuit and snack makers use palm oil for their products.

India is the largest importer of vegetable oils, a base ingredient for cooking most common dishes, and meets up to two-thirds of its domestic demand through imports, costing it up to $10 billion annually. The country typically imports from producers such as Malaysia, Indonesia, Brazil, Argentina and Russia. Edible oil is India’s third most high-value import, after crude oil and gold.

Currently, India’s levies on edible oil imports ranges between 32.5% (for palm oil, the cheapest edible oil) and 35% for soyabean oil. Therefore statement 2 is wrong.