India has cut import duties on various edible oils to help lower domestic prices just ahead of the festive season, amid rising inflation and increasing oil imports, signalling a strategic move to ease consumer costs.
India has cut import duties on a range of edible oils, in a move aimed at cooling domestic prices ahead of the festive season. The finance ministry said the changes, which take effect on September 24, reduce the basic customs duty on crude soybean oil and crude palm oil to 5 per cent from 10 per cent, while the levy on refined soybean oil and refined palm oil falls to 27.5 per cent from 32.5 per cent. The duty on crude sunflower oil has been abolished, and the tariff on refined sunflower oil has been lowered to 22.5 per cent from 32.5 per cent.
The timing reflects growing pressure in the retail market. According to consumer price data cited by The Hindu BusinessLine, the All India Consumer Food Price Index for August rose to 5.95 per cent from 5.52 per cent in July, while inflation in refined oil climbed to 14.24 per cent. Industry figures have also pointed to a broader build-up in edible oil costs over the past year, with the upcoming festival period expected to lift demand for cooking oils used in sweets, snacks and food-service channels.
Sudhakar Desai, president of the Indian Vegetable Oil Producers’ Association, welcomed the move but said the effect at the checkout will depend on more than customs duties alone. Speaking to The Hindu BusinessLine, he pointed to international commodity prices, freight costs, exchange-rate movements, domestic availability and inventory levels as key factors shaping retail prices. He also said the sector’s immediate concern is ensuring adequate supply across the country as household demand rises during the festival months.
The association has also raised concerns about competitive pressure from zero-duty imports via Nepal, arguing that duty arbitrage continues to favour imported oils over domestically refined products. In a separate note to members, the Solvent Extractors’ Association of India said it had recently briefed senior government officials on stock levels and supply conditions, while warning that the global market could become more volatile because of El Niño risks, the Russia-Ukraine war’s effect on sunflower oil shipments and Indonesia’s B50 biodiesel programme. The association said those factors could increase the strategic importance of soybean oil in the months ahead. Meanwhile, SEA data show that India’s edible oil imports rose 4.56 per cent in the first 10 months of the oil year to August, reaching 136.19 lakh tonnes from 130.24 lakh tonnes a year earlier, led by higher purchases of palm and soybean oil.
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