India cuts crude edible oil duty to 10% to control prices, aid demand

Soybean processors say it will hurt oilseed growers, other say will push up domestic refining

To tame inflation in oils and fats, India lowered the basic import tax on crude and refined edible oils by 10 percentage points which would also benefit the local processing industry.

 

The move will bring down edible oil prices and boost demand and subsequently increase overseas purchases of palm oil , soyoil and sunflower oil.

 

India halved the basic customs duty on crude palm oil, crude soyoil and crude sunflower oil to 10 per cent from earlier 20 per cent the government said in a notification.

 

It will effectively bring down the total import duty on the three oils to 16.5 per cent from earlier 27.5 per cent as they are also subject to India's Agriculture Infrastructure and Development Cess and Social Welfare Surcharge.

   

In April 2025, food inflation as measured by the CPI had dropped to just 1.78 per cent down from 2.69 per cent in March 2025. Oils and Fats and Fruits were the only two items that showed a double digit inflation in April 2025. 

 

Meanwhile, welcoming the move Sudhakar Desai, President of Indian Vegetable Oil Producers’ Association (IVPA) said that  the decision of the government to reduce the basic import duty on crude edible oil only from 20 per cent to 10 per cent while leaving the net refined oil duties unchanged at 35.25 percent will increase the duty differential between crude and refined edible oil to 19.25 per cent. 

 

"It is a significantly bold move towards ensuring Make in India and also protecting the sector from influx of refined oils causing capacity injury to the vegetable oil sector. This move will not just strengthen the domestic refining capacities of Indian refiners but also ensure fair price to oilseed farmers and a fair price to the consumers, Desai said.

 

According to IVPA data, imports of refined palm oil surged from 4.58 lakh MT during June–September 2024 to 8.24 lakh MT (representing about 30 percent of total palm oil imports) in the period October 2024–February 2025. 

 

Additionally under SAFTA provisions of zero duty, refined oils have been glutting the Indian markets due to the huge  refined oil duty advantage neighbouring countries enjoyed.

 

However, not all shared the optimism. The Indore-based Soybean Processors Association of India (SOPA) said in statement that duty reduction on edible oils is a step against local crushing and farmers.

 

It said the move will help the import lobby at the cost of industry, will be a huge setback for goal of self sufficiency in edible oils. 

 

"What made the government to take such a step just a day after increasing MSP is a surprising," SOPA added.