Govt asks edible oil industry to pass on duty cut benefits to consumers

Time of India

12-06-2025

HighlightsThe Indian food ministry has mandated that edible oil industry associations immediately pass on the reduction in customs duties on crude oils to consumers, in response to rising food inflation. The Basic Customs Duty on crude edible oils, such as crude sunflower, soybean, and palm oils, has been halved from 20 percent to 10 percent to alleviate the impact of sharp price increases on consumers. Industry stakeholders are required to adjust their Price to Distributors and Maximum Retail Price in accordance with lower landed costs and provide weekly updates on reduced pricing to the Department of Food and Public Distribution.
The food ministry has ordered
edible oil industry associations
to immediately pass on import duty reductions to consumers, following a government decision to halve customs duties on crude oils amid soaring
food inflation
.
A meeting with leading edible oil industry associations and industry stakeholders was held under the chairmanship of Secretary, Department of Food and Public Distribution, where an advisory was issued directing them to pass on the benefits from the duty reduction to consumers.
Industry stakeholders are expected to adjust their
Price to Distributors
(PTD) and Maximum Retail Price (MRP) in accordance with lower landed costs with immediate effect, the department said in a statement.
Associations have been requested to advise their members to implement immediate price reductions and share updated brand-wise MRP sheets with the department on a weekly basis.
The ministry shared a format with the edible oil industry for reporting reduced MRP and PTD data, emphasising that "timely transmission of benefits through the supply chain is imperative to ensure consumers experience corresponding decreases in retail prices".
The decision came after a detailed review of the sharp rise in edible oil prices following last year's duty hike. The increase led to significant inflationary pressure on consumers, with retail edible oil prices soaring and contributing to rising food inflation.
The Centre has reduced the Basic Customs Duty (BCD) on
crude edible oils
-- crude sunflower, soybean, and palm oils -- from 20 per cent to 10 per cent, resulting in the import duty differential between crude and refined edible oils increasing from 8.75 per cent to 19.25 per cent.
This adjustment aims to address the escalating edible oil prices resulting from the September 2024 duty hike and concurrent increases in international market prices.
The 19.25 per cent duty differential between crude and refined oils will help encourage
domestic refining capacity
utilisation and reduce imports of refined oils, officials said.
Import duty on edible oils
is one of the important factors that impacts landed cost of edible oils and thereby domestic prices. By lowering the import duty on crude oils, the government aims to reduce the landed cost and retail prices.