Edible Oil To Get Cheaper Soon As Govt Cuts Basic Customs Duty To 10%; Details Here
The Centre reduced the basic customs duty on crude palm, soybean, and sunflower oils from 20% to 10%, lowering the total import duty to 16.5% to cut cooking oil prices.
In a major decision aimed at reducing domestic cooking oil prices and boosting local processing, the Centre has slashed the basic customs duty on crude palm oil, crude soyabean oil, and crude sunflower oil from 20% to 10%. The decision, effective immediately, is expected to ease retail inflation and reinvigorate India's vegetable oil refining industry.
A notification issued by the finance ministry on Friday confirmed the revision, stating that the total effective import duty on these three crude oils now stands at 16.5%, including surcharge and cess, down from 27.5%.
The basic customs duty on refined oil remains unchanged at 32.5%. Currently, the effective duty on refined oils is 35.75%.
The move comes at a critical time, as India — the world's largest importer of edible oils — imported 159.6 lakh tonnes of edible oils valued at Rs 1.32 lakh crore during the 2023–24 oil marketing year (November–October). India meets over 50% of its edible oil needs through imports, with palm oil sourced from Malaysia and Indonesia, and soyabean oil primarily from Brazil and Argentina.
advetisement
This significant gap between crude and refined oil duties has been a long-standing demand of industry bodies like SEA and the Indian Vegetable Oil Producers' Association (IVPA), who argue that the influx of cheaper refined oils under trade agreements has harmed domestic refiners.
'The government's decision to increase the duty differential between crude and refined oils from 8.25% to 19.25% is a bold and timely move. It will discourage imports of refined palmolein and shift demand back to crude palm oil, thereby revitalising the domestic refining sector," said Sanjeev Asthana, president of the Solvent Extractors' Association of India (SEA).
Solvent Extractors Association of India's (SEA) executive director B V Mehta said the basic custom duty on crude palm oil, crude soyabean oil and crude sunflower oil has been reduced to 10 per cent from the earlier 20 per cent.
Sudhakar Desai, president of IVPA, said, 'We thank the government for accepting the IVPA recommendation to increase the duty differential between crude and refined edible oils to 19.25%. This is a significantly bold move towards ensuring Make in India and also protecting the sector from the influx of refined oils causing capacity injury to the vegetable oil sector."
According to IVPA data, refined palm oil imports surged from 4.58 lakh metric tonnes during June-September 2024 to 8.24 lakh metric tonnes between October 2024 and February 2025 — accounting for nearly 30% of total palm oil imports. Much of this surge was attributed to zero-duty imports under SAFTA, which created trade distortions and undercut domestic processors.
The revision in import duties is expected to bring immediate relief to consumers through reduced prices of packaged cooking oils, while simultaneously strengthening domestic refining capacities and ensuring fair returns for Indian oilseed farmers.
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First Published:
May 31, 2025, 11:42 IST
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