Question map
Consider the following statements : 1. The quantity of imported edible oils is more than the domestic production of edible oils in the last five years. 2. The Government does not impose any customs duty on all the imported edible oils as a special case. Which of the statements given above is/are correct ?
Explanation
The correct answer is option A (Statement 1 only).
**Statement 1 is correct:** During 1985-86 and 2016-17, while domestic edible oil production increased by around 1.8 times, imports increased by around 33 times[1]. This dramatic disparity indicates that by the recent period (2013-14 to 2017-18), imported quantities had significantly exceeded domestic production, making statement 1 correct.
**Statement 2 is incorrect:** The period 2013-14 to 2017-18 has been characterized by increasing tariff rates due to increasing imports[2]. Furthermore, during September 23, 2016 and March 1, 2018, the duties were revised and increased 4 times, with the most recent duty hike announced on March 1, 2018[3]. This clearly shows that the government does impose customs duties on imported edible oils, contrary to what statement 2 claims.
Therefore, only statement 1 is correct.
Sources- [1] https://desagri.gov.in/wp-content/uploads/2024/04/2018-19-Trade-Policy-and-the-Edible-Oilseed-Sector-of-India.pdf
- [2] https://desagri.gov.in/wp-content/uploads/2024/04/2018-19-Trade-Policy-and-the-Edible-Oilseed-Sector-of-India.pdf
- [3] https://desagri.gov.in/wp-content/uploads/2024/04/2018-19-Trade-Policy-and-the-Edible-Oilseed-Sector-of-India.pdf
PROVENANCE & STUDY PATTERN
Full viewThis question tests 'Macro-Economic Trends' (Statement 1) and 'Fiscal Policy Logic' (Statement 2). It rewards reading the Economic Survey's 'External Sector' chapter or tracking inflation news, where edible oil duties are frequently tweaked to balance farmer interests vs. consumer prices.
This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.
- Statement 1: In India, for the five-year period 2013-14 to 2017-18, was the quantity of imported edible oils greater than domestic edible oil production?
- Statement 2: As of 2018 in India, does the government impose any customs duty on imported edible oils, or are all imported edible oils entirely exempt from customs duty?
States that palm oil has dominated Indian edible-oil imports and accounts for around 74% of total edible-oil imports, implying imports are large and concentrated.
A student could combine this share with known annual import volumes of palm oil (from trade statistics) to approximate total edible-oil imports and compare with domestic production figures for 2013–14 to 2017–18.
Notes India is a major importer (with China) and that global consumption and trade are large, indicating substantial import dependence for edible oils.
Use reported global/regional import shares plus India’s import role to estimate India’s import volumes relative to likely domestic production in those years.
Contains the exact claim as a commonly asked question, showing this comparison (imports vs domestic production) is a recognized issue in study materials.
Treat this as a prompt to look up the underlying data sources (DGCI&S, Ministry of Commerce, or Directorate of Economics & Statistics) for import and production series for 2013–14 to 2017–18.
NCERT highlights the puzzle of why India imports edible oils despite being agriculturally rich, implying imports are significant relative to domestic supply.
Combine this conceptual point with specific production and import statistics for the period to judge whether imports exceeded production.
Gives India’s position among major oilseed producers and shares of world oilseed output, indicating substantial but not dominant global production capacity.
Use these production-share clues to temper expectations about domestic output—then compare actual national production numbers against import volumes for 2013–14 to 2017–18.
- Directly states duties were revised and increased multiple times up to March 1, 2018, showing import duties applied in 2018.
- Says tariff rates of all imported edible oils increased during that period — contradicting the claim of full exemption.
- Explains that following import surges, 'customs duties on different edible oils imported were raised', indicating duties existed rather than exemptions.
- Links policy changes and import volumes to increases in customs duties, supporting that edible oils were subject to duties in 2018.
This snippet records an exam-style claim (statement 2) that 'the government does not impose any customs duty on all the imported edible oils as a special case', indicating this exact assertion was discussed and contested in study material.
A student could treat this as a hypothesis to be checked against tariff schedules or government notifications from around 2018 to confirm or refute it.
Defines 'Basic Customs Duty' as charged on goods imported to India, with rates varying by product (5–40%) — a general rule that customs duties apply to imports unless specifically exempted.
Using this rule, a student can infer that edible oils would be subject to customs duty unless there is an explicit exemption; they can check the tariff schedule for edible oils in 2018.
Describes specific schemes where certain imports are 'duty free' (e.g., inputs for export production, capital goods under EPCG), showing that zero-duty treatment exists but is selective and scheme-based.
A student could use this pattern to reason that any zero-duty treatment for edible oils would likely be via a named scheme/notification rather than a blanket exemption for all edible oils.
Gives examples of selective customs duty exemptions or rate reductions used by government policy (e.g., for green mobility, battery parts), illustrating that duty exemptions are policy tools targeted at particular items.
A student could extrapolate that similar targeted policy choices (if any) for edible oils would be documented in budget/notification texts rather than implied by general law.
Describes the government subsidising distribution of imported edible oil through PDS (2008–11), which shows administrative support for imported edible oils but is a subsidy, not a customs-duty statement.
A student could use this to reason that government support for imports has taken the form of subsidies historically, so duty exemption is not the only or necessary policy lever to lower consumer prices.
- [THE VERDICT]: Doable. Statement 1 is a major economic headline (India is the world's largest edible oil importer). Statement 2 is an 'Extreme Statement' trap.
- [THE CONCEPTUAL TRIGGER]: Inflation & Balance of Payments. Whenever CPI rises, newspapers discuss 'Imported Inflation' via Crude Oil and Edible Oil.
- [THE HORIZONTAL EXPANSION]: Memorize the 'Big 3' Import Dependencies: 1) Crude Oil (>80%), 2) Gold (High), 3) Edible Oil (~60%). Know the suppliers: Palm Oil (Indonesia/Malaysia), Soybean Oil (Argentina/Brazil), Sunflower Oil (Ukraine/Russia).
- [THE STRATEGIC METACOGNITION]: Do not memorize exact tonnage. Memorize the 'Dependency Ratio'. Ask: 'Do we produce enough to feed ourselves?' For Wheat/Rice: Yes (Surplus). For Oil/Pulses: No (Deficit). This binary clarity solves Statement 1.
Several references state palm oil is the single largest imported and consumed vegetable oil in India and constitutes a large share of edible-oil imports.
High-yield for UPSC because questions often probe composition of imports, trade dependence, and environmental/economic implications of specific commodities. Links trade patterns to international suppliers (Indonesia, Malaysia) and to domestic consumption trends — useful for questions on trade policy and agricultural economics.
- Environment, Shankar IAS Acedemy .(ed 10th) > Chapter 6: Environmental Issues > Consumption of palm oil in India > p. 117
- Environment, Shankar IAS Acedemy .(ed 10th) > Chapter 6: Environmental Issues > When forest shrink, so does the horde of endangered species > p. 116
- Exploring Society:India and Beyond ,Social Science-Class VII . NCERT(Revised ed 2025) > Chapter 12: Understanding Markets > DON'T MISS OUT > p. 256
References ask why India imports edible oil despite agricultural strengths and give context on oilseeds production and consumption shares, highlighting a domestic shortfall relative to consumption.
Crucial for UPSC: framing issues of food security, agricultural policy, and trade. Helps answer questions on causes of import dependence (production limits, crop choices, price competitiveness) and policy responses (MSP, diversification). Practice linking production statistics to policy measures and trade data.
- INDIA PEOPLE AND ECONOMY, TEXTBOOK IN GEOGRAPHY FOR CLASS XII (NCERT 2025 ed.) > Chapter 8: International Trade > Changing Patterns of the Composition of India's Import > p. 88
- Environment and Ecology, Majid Hussain (Access publishing 3rd ed.) > Chapter 12: Major Crops and Cropping Patterns in India > Oilseed > p. 30
- NCERT. (2022). Contemporary India II: Textbook in Geography for Class X (Revised ed.). NCERT. > Chapter 4: The Age of Industrialisation > Food Crops other than Grains > p. 85
Evidence describes government subsidy schemes to distribute imported edible oils through the PDS to protect poor households from price rises.
Valuable for answering policy and governance questions on how the state mitigates import-driven price shocks and protects vulnerable groups. Connects trade/international dependence to domestic welfare measures and fiscal policy — common UPSC question nexus.
- Environment, Shankar IAS Acedemy .(ed 10th) > Chapter 6: Environmental Issues > Subsidies for Distribution of Imported Palm Oil: > p. 118
The question asks about whether customs duty applies to edible oil imports; reference [4] explains that BCD is charged on goods imported to India and that rates vary by product.
High-yield for UPSC: understanding BCD clarifies whether a product category is automatically exempt or subject to tariff schedules. Links to topics on trade policy, tariffs, and fiscal revenue; helps answer questions on import protection, incentives and sectoral exemptions. Prepare by studying how BCD schedules work, typical rate ranges, and exceptions.
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > OTHER INDIRECT TAXES NOT REPLACED BY GST > p. 95
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 15: Budget and Economic Survey > Indirect Taxes > p. 448
Whether customs policy targets 'edible oils' may be influenced by the composition of imports; reference [5] shows palm oil constitutes a large share (~74%) of edible oil imports.
Useful to link trade policy to sectoral realities: knowing which sub-products dominate imports (e.g., palm oil) helps anticipate policy measures (tariffs, subsidies) targeted at specific oils rather than a blanket treatment. Connects to questions on agricultural trade, food security, and import dependence.
- Environment, Shankar IAS Acedemy .(ed 10th) > Chapter 6: Environmental Issues > Consumption of palm oil in India > p. 117
- INDIA PEOPLE AND ECONOMY, TEXTBOOK IN GEOGRAPHY FOR CLASS XII (NCERT 2025 ed.) > Chapter 8: International Trade > Changing Patterns of the Composition of India's Import > p. 88
Policy responses to edible oil imports include subsidies and PDS distribution (reference [2]), which are alternatives to tariff measures and affect import-demand dynamics.
Helps aspirants evaluate non-tariff policy tools alongside customs duties — important for questions on government interventions in food markets. Understand subsidy schemes, PDS linkages and their impact on domestic prices and import volumes.
- Environment, Shankar IAS Acedemy .(ed 10th) > Chapter 6: Environmental Issues > Subsidies for Distribution of Imported Palm Oil: > p. 118
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 17: India’s Foreign Exchange and Foreign Trade > Recent Major Schemes to promote Foreign Trade > p. 505
Since they asked about Edible Oil dependency, the next logical target is 'Pulses' or 'Fertilizers'. Fact: India is the largest producer AND consumer of pulses, yet imports them (though gap is narrowing). For Fertilizers: India is fully dependent on imports for Potash (K), but produces Urea (N) domestically (with gas imports).
Apply the 'Fiscal Absolutism' rule to Statement 2. The phrase 'does not impose ANY customs duty on ALL... as a special case' is technically impossible in a dynamic economy. Governments constantly tweak duties (Basic Customs Duty, Cess) based on harvest seasons and inflation. No major agricultural commodity enjoys a permanent, blanket tax holiday.
Link this to GS2 International Relations: India's edible oil dependency dictates foreign policy. Example: India's reaction to Malaysia's Kashmir comments (2019) involved restricting Palm Oil imports. Trade dependency creates diplomatic leverage (or vulnerability).