Government Cuts Import Duty on Crude Edible Oil in India

The Government has reduced the Basic Customs Duty (BCD) on major imported crude edible oils, citing the need to moderate domestic edible oil prices and address inflationary pressures linked to higher international edible oil prices. 

The import duty on crude sunflower oil in India has been reduced from 10% to Nil, while the import duty on soybean seed oil and palm oil import duty has been reduced from 10% to 5%. 

19.25% Duty Differential Between Crude and Refined Oils 

The applicable BCD on the respective refined edible oils has also been reduced, while maintaining an import duty differential of 19.25% between crude and refined edible oils. According to the Government, import duties form part of the landed cost of imported edible oils and consequently have a bearing on domestic market prices. 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. 

The duty differential has been maintained to support the utilisation of domestic refining capacity and discourage excessive imports of refined edible oils. 

Advisory to Industry on Passing on Duty Benefit 

The Government has also issued an advisory to Edible Oil Associations and Industry stakeholders regarding the benefit arising from the reduction in import duty on crude edible oils. 

Industry stakeholders have been requested to 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 requested to advise their members to implement the corresponding price reductions without delay.