Ahead of festivals, Centre cuts import duty on edible oils

The Union government has lowered the Basic Customs Duty on major imported crude edible oils, including palm oil, in a move it said is aimed at easing domestic edible oil prices and reducing inflationary pressure from higher global prices.

The decision was announced on Thursday (September 24, 2026), with the Union Food and Consumer Affairs Ministry saying it was taken to moderate prices, provide relief to consumers, and mitigate “inflationary pressures” arising from the “sharp increase in international edible oil prices”.

What has changed in import duty

The BCD on crude sunflower oil has been reduced from 10% to nil.

For crude soybean oil and crude palm oil, the BCD has been reduced from 10% to 5%.

The government has also reduced the applicable BCD on the respective refined edible oils while maintaining an import duty differential of 19.25% between crude and refined edible oils.

According to the Centre, the duty rationalisation takes into account the increase in international edible oil prices and the consequent rise in domestic landed costs and retail prices.

The government said import duties form an important component of the landed cost of imported edible oils and therefore have a bearing on prices in the domestic market.

Why the cut matters for consumers

The Centre expects the reduction in BCD on crude edible oils to lower their landed cost.

It also expects the benefit to move through the domestic supply chain.

“The measure is intended to provide relief to consumers while contributing to the broader objective of containing food-price and overall inflationary pressures,” the government said.

The ministry’s statement links the duty cut directly to the pressure created by higher international edible oil prices and the resulting impact on landed costs and retail prices within India.

Because import duties affect landed cost, the Centre’s stated expectation is that a lower duty can help reduce cost pressures before edible oils reach the domestic market.

Domestic refiners kept in focus

The government said it has maintained the duty differential between crude and refined edible oils to support the utilisation of domestic refining capacity.

It also said the differential is meant to discourage excessive imports of refined edible oils.

“The measure is expected to provide a more level playing field for domestic refiners while supporting continued value addition within the country,” the government said.

By retaining the 19.25% gap between crude and refined edible oils, the Centre has sought to combine consumer relief with support for domestic refining activity.

Industry response ahead of festive season

Reacting to the development, the Indian Vegetable Oil Producers’ Association, the national body of the edible oil industry, said the move comes at an important juncture, particularly with the festive season approaching.

IVPA president Sudhakar Desai said lower import duties should improve the landed costs of imported edible oils, which can provide some reduction in consumer prices.

“For the edible-oil sector, the immediate priority is to ensure adequate availability across the country during the upcoming festival months, with higher household demand as well as increased requirements from the sweets, snacks, food-service and hotel, restaurants and cafes/catering segments,” he said.

His response placed the duty reduction in the context of expected festive-season demand from households as well as sweets, snacks, food-service and hotel, restaurants and cafes/catering segments.

Advisory to pass on benefits

The government said it has issued an advisory to edible oil associations and industry stakeholders.

The advisory asks them to ensure that the full benefit arising from the reduction in import duty is passed on to consumers.

The announcement was published on September 24, 2026, at 10:29 pm IST.

Source: The Hindu