To control food inflation and protect household budgets, the Indian government has sharply cut import duties on major crude edible oils.
Under the revised tax structure announced on Thursday, the BCD on Crude Sunflower Oil has been reduced from 10% to zero (Nil). Concurrently, the duty on Crude Soybean Oil and Crude Palm Oil has been brought down from 10% to 5%.
To cushion the domestic refining sector from cheap processed imports, the government simultaneously revised the duty on refined edible oils. By doing so, it has preserved a strategic 19.25% import duty differential between crude and refined varieties. This policy cushion is intended to keep domestic oil mills operational, prevent excessive finished product imports, and encourage value addition within the country.
Rising international commodity prices have significantly bumped up the landed cost of imported edible oils over recent months, which in turn triggered a sharp uptick in domestic retail cooking oil prices. Because customs duties make up a substantial portion of the landed price, the Centre expects this duty rationalisation to immediately lower procurement costs along the supply chain.
Alongside the tax cuts, the Centre issued an explicit advisory to edible oil industry bodies and key commercial stakeholders, urging them to pass on the full benefit of lower landed costs to end-consumers without delay.
Associations have been requested to instruct member companies to immediately revise their Price to Distributors (PTD) and lower Maximum Retail Prices (MRPs) across brand lines.
The government indicated it will maintain close oversight of international price movements and domestic retail trends, emphasising its commitment to taking further measures if needed to balance consumer affordability with the economic interests of domestic oilseed farmers and refiners.
