NEW DELHI: India's trade ministry has recommended raising the tax on refined palm oil imports from Malaysia by 5% to curb cheaper purchases of the tropical oil, showed a government document.

The ministry has recommended raising the import tax for six months, said the document seen by Reuters.

India currently imposes a 40% import tax on crude palm oil and 50% on refined palm oils. But shipments of refined palm oils from Malaysia have since January been taxed only at 45%, under an agreement with Malaysia.

That led to a surge in refined palm imports in the first seven months of 2019.

Government sources on Friday said India planned to impose an extra 5% tax on vegetable oil imports within weeks and use the revenue to help boost the country's stagnating oilseed production.