MUMBAI: A leading trade body has urged the Indian government not to reduce import taxes on edible oils as lower prices could hurt local farmers who are trying to boost production.

Edible oil prices in India, the world's biggest importer of vegetable oils, have jumped recently, tracking a rally on foreign markets and after the local soybean crop was damaged by excessive rainfall.

"It would not be proper to tamper with the reduction of import duties or encourage public sector undertakings to import edible oils at concessional duties as it would be counterproductive," the Solvent Extractors' Association of India (SEA) said in a letter written to various federal ministries.

India fulfils more than 70% of its edible oil requirement through imports and the current rise in prices is necessary to encourage farmers to expand the area under oilseeds and adopt better farm practices, the SEA said.

Although the government is not currently suggesting dampening edible oil prices by cutting import taxes, it has taken such a step in the past.

Retail inflation picked up in September to 7.34%, its highest level in eight months, as food prices surged ahead of the festival season.

India currently levies import taxes of 37.5% and 45% respectively on crude and refined palm oil. Imports of crude soybean oil, crude sunflower oil and rapeseed oil attract import duty of 35%.

The south Asian country imports palm oil mainly from Indonesia and Malaysia and other oils such as soy and sunflower oil from Argentina, Brazil, Ukraine and Russia.