Centre Halves Import Duty on Crude Edible Oils to 10%
The Government of India has halved the basic customs duty (BCD) on imported crude edible oils, including sunflower, soybean, and palm oil, from 20% to 10%. The move, effective June 12, is aimed at curbing retail price inflation, encouraging domestic refining, and ensuring smoother edible oil availability in the domestic market.
Edible Oil Duty Cut
This revision increases the gap between crude and refined oil import duties from 8.75% to 19.25%, making it more economically viable to import crude oils and process them locally. The expanded differential is designed to discourage imports of refined oils and protect the domestic refining industry, which has long sought such supportive measures.
Consumer Relief & Inflation Control
The decision comes in the backdrop of rising edible oil prices, which have significantly contributed to food inflation in recent months. By reducing the import tax on crude oils, the government expects the cost of these essential commodities to drop, with benefits passed on to consumers through lower retail and distributor prices. Authorities have also called upon edible oil companies to revise their maximum retail prices accordingly.
Support for Domestic Refiners
Industry bodies such as the Solvent Extractors’ Association and the Indian Vegetable Oil Producers’ Association (IVPA) have welcomed the announcement. According to these groups, the move provides a lifeline to Indian refiners who were facing stiff competition from cheaper refined oil imports. The new duty structure is expected to revive capacity utilisation across domestic plants, ensuring better profitability and job retention in the sector.
Strategic Economic Benefits
Beyond its impact on consumer pricing and refinery margins, the duty cut also aligns with India’s broader economic goals. By incentivising domestic processing, the policy supports the “Make in India” initiative, reduces overreliance on refined imports, and safeguards farmer incomes by ensuring continued demand for domestically grown oilseeds. Additionally, it gives India room to counter trade imbalances under free trade agreements where some countries benefit from concessional tariffs on refined oils.
