India has agreed to reduce import duties on Indonesian processed palm oil to 45 per cent bringing about parity with imports from Malaysia.
The decision was taken by India in a meeting between Commerce & Industry Minister Piyush Goyal and his Indonesian counterpart Enggartiasto Lukota on the sidelines of the 51st ASEAN Economic Ministers’ Meeting (AEM) in Bangkok, Thailand, earlier this week, according to the Commerce Ministry.
In response to this, Indonesia has offered market access for India to export raw sugar by lowering the standard requirement for imported refined crystal sugar to a level that the country could find possible to meet, according to Lukita who spoke to the media in Bangkok. Indonesia has offered to lower the standard of International Commission for Uniform Methods of Sugar Analysis (ICUMSA) for imported refined crystal sugar, from 1,200 to 200.
In addition to the RBDPO export duty, Jakarta has also urged New Delhi to eliminate the trade barriers for gold exports. India has agreed to assess the barriers for Indonesian gold exports, including the pre-requisite bank guarantee required for exporting the yellow metal.
India had imposed a 45 per cent tariff for Malaysian palm oil exports under the India-Malaysia Comprehensive Economic Cooperation, while the export duty on palm oil under the ASEAN-India Free Trade Agreement was set at 50 per cent.
Interestingly, the Director-General of Trade Remedies in India has recently recommended an increase in the rate of customs duty by 5 per cent on imports of two varieties of palmolein oil originating in Malaysia for a period of 180 days to safeguard the interest of the domestic industry. The Finance Ministry is deliberating on the recommendation.
Indonesia’s exports to the country in 2018 were recorded at $13.7 billion and imports at $5 billion.
Indonesia’s main exports to India comprise coal, with exports reaching $5.37 billion in 2018, palm oil and its derivatives, $3.56 billion, natural rubber, $429.2 million, and copper ore and concentrate, $414.9 million.