In a bid to curb rising edible oil prices, the Central Government has reduced the Basic Customs Duty (BCD) on major crude edible oils—sunflower, soybean, and palm—from 20% to 10%. This policy shift, effective immediately, increases the import duty differential between crude and refined edible oils from 8.75% to 19.25%, aiming to make cooking oils more affordable for consumers while boosting domestic refining.
The decision follows a sharp rise in edible oil prices triggered by a September 2024 duty hike and escalating international market rates. The Ministry of Consumer Affairs, Food & Public Distribution stated that the reduced duty will lower the landed cost of crude oils, helping to stabilize retail prices and ease inflationary pressures. An advisory has been issued to edible oil industry associations, urging them to pass on the full benefit of the duty cut to consumers through immediate reductions in distributor prices (PTD) and Maximum Retail Prices (MRP).
The increased duty differential is designed to discourage imports of refined oils, such as palmolein, and promote demand for crude edible oils, particularly crude palm oil. This move is expected to strengthen India’s domestic refining sector, optimize capacity utilization, and ensure fair compensation for farmers.
A high-level meeting, chaired by the Secretary of the Department of Food and Public Distribution, was held with leading edible oil industry associations to discuss the implementation. Industry stakeholders have been directed to submit weekly brand-wise MRP sheets to the Department, ensuring transparency in price adjustments. The Department emphasized the need for swift action to reflect the lower costs across the supply chain, providing relief to consumers.