India cuts import duties on edible oils before festival demand rises
The Union government has reduced Basic Customs Duty on several crude and refined edible oils from September 24, citing higher international prices and the need to moderate domestic costs. The move has been welcomed by the edible-oil industry, while a farmers’ organisation says it could undermine efforts to expand domestic oilseed production.
The Union government has reduced Basic Customs Duty (BCD) on several imported crude and refined edible oils, effective September 24, citing rising international prices and the approaching festival season. The Consumer Affairs Department said the measure was intended to moderate domestic prices and contain inflationary pressures. A Finance Ministry Gazette notification amended the duty structure for major edible oils.
The BCD on crude soybean oil has been cut from 10% to 5%, while the duty on crude palm oil has also fallen from 10% to 5%. Crude sunflower oil, which previously attracted a 10% duty, will now have no BCD. The duty on sunflower oil of edible grade has been reduced from 32.5% to 22.5%.
For peanut and olive oil, the duty has fallen from 32.5% to 27.5%. The government also reduced duties on refined oils. Refined palm oil will attract 27.5%, compared with 32.5% earlier.
It said the applicable duties on refined edible oils had been reduced while preserving a 19.25% difference between crude and refined oils. According to the government, import duties form an important component of the landed cost of edible oils and influence domestic market prices. Lower duties on crude oils are expected to reduce landed costs and allow savings to pass through the domestic supply chain.
The decision follows a rise in international vegetable-oil prices. The Food and Agriculture Organization said its vegetable oil price index reached 196.9 points in August, its highest level since June 2022, after increasing for a third consecutive month. The Indian Vegetable Oil Producers’ Association welcomed the change.
Its president, Sudhakar Desai, said lower duties could improve landed costs and help reduce consumer prices, while stressing the need to ensure adequate supplies during the festival months. However, All India Kisan Sabha leader Badal Saroj criticised the decision, saying it worked against the government’s stated aim of achieving self-sufficiency in edible-oil production. He also alleged that increased imports could harm oilseed farmers.
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