Government reduces import duty on edible oils to ease prices, support domestic refining

The government on Wednesday announced a reduction in the Basic Customs Duty (BCD) on crude edible oils, including crude sunflower, soybean, and palm oils, from 20 per cent to 10 per cent.

This revision increases the import duty differential between crude and refined edible oils from 8.75 per cent to 19.25 per cent, the Ministry of Consumer Affairs, Food & Public Distribution said.

The decision follows a comprehensive review of the rising edible oil prices which were impacted by the duty hike in September 2024 and concurrent increases in global market rates.

The revised duty action has been taken to reduce the cost of crude edible oils, thereby reducing retail prices and providing relief to consumers.

Officials from the Department of Food and Public Distribution (DFPD) held a meeting with leading edible oil industry associations and stakeholders.

During the meeting, an advisory was issued urging industry participants to ensure that the benefits of the reduced duty are passed on to consumers. While stakeholders have been requested to revise the Price to Distributors (PTD) and Maximum Retail Price (MRP) accordingly and share updated brand-wise MRP data with the department on a weekly basis.

According to the government, the increased duty differential is expected to encourage domestic refining by making crude oil imports more attractive compared to refined oils and move is also intended to discourage the import of refined palmolein and redirect demand towards crude edible oils, particularly crude palm oil, thereby strengthening the domestic refining sector.

The government also emphasised that timely transmission of the reduced costs through the supply chain is essential to ensure that consumers experience a corresponding decrease in retail prices.

Moreover, the policy aims to maintain fair compensation for farmers while stabilising food inflation, according to the ministry.