India lifted the import duty on crude edible oil in April and slapped a hefty export tax of Rs 8,000 per tonne on basmati rice to tame surging inflation.
Sources said that since then both global and local market conditions have improved considerably and inflation has also started showing signs of moderation that has prompted the government to review its earlier decisions. Prices of palm oil, which is the main benchmark of global edible oil market and has direct impact on Indian prices, as the country is the world's second largest importer, has declined by half this year lowering purchase costs for India.
On Wednesday, January-delivery palm oil dropped as much as 6.7% to 1,542 ringgit ($434) a metric tonne, the lowest since October 2006, on the Malaysia Derivatives Exchange. It closed at 1,565 ringgit.
Global edible oil prices have fallen and have created problems for producers. We will soon decide on imposing duty on imports, Sharad Pawar told reporters.
On the export tax on basmati rice, Pawar said that the government would also look at the decision to remove it after Diwali.
On October 20, FE had reported that the government is looking at a host of its earlier inflation-control decisions in view of falling prices. Rice prices have dropped to below $700 per tonne in the global markets from its earlier level of over $1,000 per tonne because of glut and falling demand.