New Delhi: India’s edible oil and soybean processing industry has cautiously welcomed the interim India-US trade agreement announced on Saturday. While the framework signals stronger bilateral trade ties, industry players say many important details are still missing, especially on tariff cuts, quotas and quality norms.
Under the agreement, the US will cut tariffs on Indian goods to 18% from 50 percent, while India will eliminate or reduce import duties on US industrial goods and several food and agricultural items. These include soybean oil, animal feed, fruits, nuts, wine and spirits.
Heavy Import Dependence Shapes View
The Solvent Extractors Association of India (SEA) said the deal is important as India depends heavily on imported soybean oil. During the 2024-25 edible oil year, India imported a record 5.47 million tonnes of soybean oil, mainly from Argentina and Brazil, much of it genetically modified.
Currently, India imports only 1.5–2 lakh tonnes of soybean oil from the US. This oil attracts a 16.5% import duty, including basic customs duty, agri-cess and education cess.
However, SEA pointed out that US soybean oil is costlier by USD 30–40 per tonne, along with higher logistics costs. This may limit the benefit of any duty reduction for Indian buyers.
Key Questions Still Unanswered
Industry bodies are waiting to know:
- Will US soybean oil be imported under a quota system?
- Will the agri and education cess be removed or reduced?
SEA said cheaper US imports could reduce shipments from Argentina and also impact palm oil prices. It may also reduce refined oil imports from Nepal, which currently enter India at lower costs.
DDGS Imports Raise Concerns
On distillers dried grains with solubles (DDGS), used as animal feed, duty-free imports from the US could increase supply for cattle and poultry. However, India already produces 7.5–8 million tonnes of DDGS domestically.
Industry leaders warned that large imports could hurt local processors and prices.
GM vs Non-GM Confusion
The Soybean Processors Association of India (SOPA) said there is no clarity on whether genetically modified (GM) DDGS will be allowed. Currently, India does not permit GM-DDGS imports.
Wait-and-Watch Approach
Industry bodies said the agreement shows positive intent, but the real impact will depend on the fine print. Clear rules on quotas, duties and quality standards are now critical.
