India has reduced the basic import customs duty on crude edible oils—including crude palm oil, crude soy oil, and crude sunflower oil—from 20% to 10%, effectively lowering the total import duty on these oils from 27.5% to 16.5%. This move aims to curb rising food inflation and stimulate the domestic vegetable oil refining sector.
Key points to note:
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The reduced duty applies only to crude oils; the import tax on refined palm oil, refined soy oil, and refined sunflower oil remains unchanged at 35.75%.
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The duty reduction widens the gap between crude and refined oil import taxes to 19.25%, encouraging importers to bring in more crude oils, which local refiners can process, thereby supporting the domestic refining industry.
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India imports over 70% of its vegetable oil consumption. Its primary suppliers for palm oil are Indonesia, Malaysia, and Thailand, while soyoil and sunflower oil mainly come from Argentina, Brazil, Russia, and Ukraine.
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Industry experts, such as B.V. Mehta (Solvent Extractors' Association of India) and Sandeep Bajoria (Sunvin Group), expect this duty cut to lower retail edible oil prices and revive consumer demand, which has recently been sluggish.
Overall, this tax adjustment is designed to balance the interests of consumers and domestic refiners by making crude edible oils cheaper to import, potentially leading to more affordable cooking oil prices across India.
