New Delhi: India’s edible oil refiners and soybean processors have responded cautiously to the interim trade arrangement signed between India and the United States, saying the real impact will depend on finer details that are yet to be spelled out, particularly on tariffs, quotas and quality norms.
While the agreement proposes a sharp reduction in US duties on Indian exports—from 50 per cent to 18 per cent—India, in turn, has agreed to ease or scrap import levies on select American industrial goods and agricultural commodities. However, industry bodies say clarity is lacking on how these changes will apply to soybean oil and animal feed, two sensitive segments for India.
The Solvent Extractors’ Association of India (SEA) pointed out that any change in soybean oil imports could have wide ramifications, given India’s dependence on overseas supplies. During the 2024–25 oil year, the country imported an all-time high of 5.47 million tonnes of soybean oil, largely from Argentina and Brazil, where genetically modified varieties dominate.
At present, imports from the US are relatively small—estimated between 1.5 and 2 lakh tonnes annually—and attract a combined duty of 16.5 per cent, including customs duty and cess components. SEA Executive Director B.V. Mehta said that even if tariffs are reduced, American soybean oil may struggle to gain a price advantage.
“US-origin soybean oil typically costs $30–40 per tonne more for Indian buyers, and freight adds further to the expense. So any tariff relief may not translate into a major benefit unless duties are completely removed,” Mehta noted.
Industry representatives are also awaiting confirmation on whether imports will be governed by a quota system and whether existing cesses will continue to apply. According to SEA, higher inflows from the US could disrupt established supply chains, potentially reducing shipments from South America and influencing global palm oil prices.
On the animal feed front, the association said duty-free access for US feed products could increase availability for India’s poultry and livestock sectors. However, this could also affect domestic producers, particularly those manufacturing distillers’ dried grains with solubles (DDGS), a maize- and rice-based byproduct widely used as a protein substitute.
India currently produces around 7.5–8 million tonnes of DDGS annually. “An influx of cheaper imports could pressure local prices and hurt domestic processors,” Mehta cautioned.
Echoing these concerns, Soybean Processors Association of India (SOPA) Executive Director D.N. Pathak highlighted regulatory uncertainties around genetically modified feed. India has not yet cleared GM DDGS for use, he said, and the agreement does not clarify whether imports from the US would be restricted to non-GM variants or capped under a quota.
“With so many unanswered questions, it’s difficult to assess the true impact of the deal,” Pathak said, adding that the industry is waiting for official guidelines before drawing conclusions.
