India Halves Import Duty on Crude Edible Oils to Curb Inflation
In a major policy move aimed at controlling food inflation and supporting the domestic edible oil industry, the Indian government has slashed the basic customs duty on crude palm oil, soybean oil, and sunflower oil from 20% to 10%. With additional cesses and surcharges included, the effective duty now stands reduced from 27.5% to 16.5%.
The move comes amid persistent concerns over the rising cost of essential food items and seeks to ease the burden on consumers while securing adequate domestic supply through higher imports.
Industry Urged to Pass On Benefits
Following the announcement, the Solvent Extractors’ Association of India (SEA) has called on all its member refiners and processors to lower the maximum retail prices of packaged edible oils. The association emphasized that the government’s decision was consumer-centric, and the benefit of the duty cut must be reflected in the retail market within the next 25 to 30 days.
Industry stakeholders have been encouraged to act in the spirit of fair pricing and ensure that the reduced cost of imported crude oils translates into relief for everyday consumers.
Boosting Domestic Refining and Make in India
The duty cut has widened the margin between crude and refined edible oil imports to 19.25%, reinforcing the government’s strategy of promoting local refining. By discouraging refined oil imports and encouraging crude oil processing within India, the policy aims to strengthen the domestic value chain, generate employment, and bolster the ‘Make in India’ initiative.
This realignment is expected to enhance refinery utilization across India and ensure that local processors gain a competitive edge over foreign suppliers of finished oil products.
Wider Economic and Sectoral Impact
India currently imports over half of its edible oil requirements, sourcing palm oil from Indonesia and Malaysia, soybean oil from Brazil and Argentina, and sunflower oil from Ukraine and Russia. The latest policy shift is likely to increase crude oil import volumes, reduce input costs for FMCG manufacturers, and provide relief to households struggling with rising food prices.
The edible oil sector plays a vital role in India’s food security and inflation management. With this duty reduction, the government is hoping to balance affordability for consumers with sustainability and growth for domestic industries.
