InfoSAWIT, KUALA LUMPUR – The increase in import duties on palm oil by India poses a temporary challenge to the competitiveness of Malaysian palm oil exports. However, the Malaysian Ministry of Plantation and Commodities asserts that the sector remains resilient in facing these policy changes.
The ministry explained that the increase in tariffs, referred to as effective import duties, has raised the tax on crude palm oil (CPO) from 5.5% to 27.5%, and on processed palm oil from 13.75% to 35.75%. This policy is implemented to regulate domestic supply in India while protecting its processing industry.
“This tariff change is a temporary challenge that will be addressed with various strategies to maintain the competitiveness and sustainability of Malaysian palm oil exports,” said a ministry spokesperson, as quoted by InfoSAWIT from MPOC on Sunday (December 29, 2024).
Despite the tariff changes, Malaysia's palm oil exports to India have recorded significant growth. From January to October 2024, export volumes increased by 16.4% to 2.67 million tons compared to the same period last year.
This increase reflects stable demand from the Indian market, despite tariff barriers. “This data shows the Indian market's confidence in the quality of Malaysian palm oil, as well as the importance of the strategic trade relationship between the two countries,” the ministry added.
Malaysia plans to enhance promotion and diversify markets to mitigate the impact of India's policy. Additionally, efforts to strengthen sustainability standards, such as the Malaysian Sustainable Palm Oil (MSPO) certification scheme, will continue to attract more international buyers.
In facing global challenges, the Malaysian palm oil sector remains one of the main pillars of the country's economy. The government is optimistic that cooperation with partner countries like India can continue to be strengthened to create mutually beneficial solutions.
This tariff increase is expected not to be a long-term obstacle but rather an opportunity to enhance the competitiveness of Malaysian palm oil in the global market. (T2)
