India increases duty on cooking oils

Part of the syllabus: International Economics
Source: Taipei Times
Date of the article: 2015-09-18
Link to article: India increases duty on cooking oils
IB Economics Internal Assessment article for the International Economics part of the syllabus.

Possible talking points:

  • Explain that the tax mentioned in the article is a tariff, define it and sketch a diagram to show how the tariff is expected to work. Furthermore, the motivation of this increased duty can be quoted.
  • To evaluate, you could look at the effect on consumers who will probably pay the tax (mentioned in the article). An argument could be that India is a developing country and offering lower cooking-oil prices (which is essential?) could mean a higher living standard for Indians (which now will be lost).
  • Further evaluation of other markets which will be affected by this tariff (article briefly mentions those as well.) And again the previous argument: consumers eventually lose and
  • Are the domestic “oilseed growers and refiners” really worth saving if they are not as efficient as other countries? Could the tariff be holding off an important structural change which must eventually take place? Or is it an underdeveloped market and it needs protection until it takes advantage of economies of scale? Possibly neither – maybe it is a temporary solution to fallen prices of those goods?
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