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To keep oil price in check, Govt cuts import duty by 10%
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Saturday, 14 June, 2025, 08 : 00 AM [IST]
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Ashwani Maindola, New Delhi
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To keep the price rise of edible oil in check, the Union Government has decided to reduce the import duty on edible oils by 10%. A notification in this regard has been issued, wherein the Central Government has cut basic Customs Duty for crude edible oils (crude soybean oil, crude palm oil and crude sunflower oil) to 10% from 20%, this makes the effective duty on crude oils 16.5% (including 5% Agri Cess).
According to the Ministry of Food and Public Distribution, the country has to rely on imports to meet the gap between demand and supply. Import of edible oil is under Open General Licence and in a bid to control the continuous rise in the cooking oil prices since past one year, the decision was taken.
For refined oils (refined soybean, refined palm oils, and refined sunflower oil) the basic Customs Duty has remained the same at 32.5%. This makes the effective duty on refined oils at 35.75%.
"Import duty on edible oils is one of the important factors that impacted landed cost of edible oils and thereby domestic prices. By lowering the import duty on crude oils, the government aims to reduce the landed cost and retail prices of edible oils, providing relief to consumers and helping to cool overall inflation. The reduced duty will also encourage domestic refining and maintain fair compensation for farmers," reads the statement of the Ministry.
Further, the statement added that after this reduction in basic Customs Duty on crude palm, soybean and sunflower oil, which helps to maintain a duty differential of 19.25% between crude and refined oils to encourage domestic refining capacity utilisation and reduce imports of refined oils, the Government has also extended the free import of refined palm oils till further orders.
Meanwhile, Shankar Thakkar, president of the All India Edible Oil Traders Federation, said that this change reversed the high import duty imposed on these oils for more than eight months. As a result, the effective import duty on all three products of crude palm, soy and sunflower has come down from 27.5% to 16.5% which includes basic Customs Duty and additional duty.
Thakkar expects that the cut in import duty will be passed on to the consumers and the impact will be evident in coming days.
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