Government Cuts Import Duty on Major Edible Oils to Provide Relief to Consumers
The Government of India has reduced the Basic Customs Duty (BCD) on major imported crude edible oils effective September 24, 2026, with the objective of moderating domestic edible oil prices, providing relief to consumers, and mitigating inflationary pressures arising from the sharp increase in international edible oil prices.
The duty rationalization includes specific reductions: BCD on Crude Sunflower Oil has been reduced from 10% to Nil, while BCD on Crude Soybean Oil and Crude Palm Oil has been reduced from 10% to 5%. The government has simultaneously reduced the applicable BCD on the respective refined edible oils while maintaining a critical import duty differential of 19.25% between crude and refined edible oils. This differential is intended to support the utilization of domestic refining capacity and discourage excessive imports of refined edible oils, thereby providing a more level playing field for domestic refiners and supporting continued value addition within the country.
The policy change takes into account the increase in international edible oil prices and the consequent rise in domestic landed costs and retail prices. Since import duties constitute an important component of the landed cost of imported edible oils, the reduction in BCD on crude edible oils is expected to lower their landed cost and facilitate transmission of the benefit through the domestic supply chain.
Advisory to Industry for Consumer Benefit
The Government has issued an advisory to edible oil associations and industry stakeholders to ensure that the full benefit arising from the reduction in import duty is passed on to consumers. Industry stakeholders have been requested to immediately revise their Price to Distributors (PTD) and Maximum Retail Price (MRP) in accordance with the reduction in landed costs. Edible oil associations have also been advised to instruct their members to implement corresponding price reductions without delay.
The Government will continue to monitor developments in international edible oil markets and domestic prices and will take appropriate measures as necessary to safeguard consumer interests while maintaining a balanced policy environment for farmers and the domestic edible oil industry.