The central government has announced a reduction in basic customs duty (BCD) on crude and refined edible oils, a strategic move aimed at curbing rising retail prices as the country approaches the peak festive season. The changes, detailed in a notification from the finance ministry’s department of revenue, take effect from Thursday and amend the previous customs notification dated 24 October 2025.
Under the new structure, the BCD on crude soybean and palm oils has been lowered from 10% to 5%, while their refined counterparts see a reduction from 32.5% to 27.5%. Sunflower oil received a more significant adjustment, with the duty on crude variants eliminated entirely from its previous 10% rate, and the duty on refined sunflower oil reduced to 22.5% from 32.5%.
This policy intervention follows a period of sustained price increases for cooking oils, which have placed significant strain on household budgets. Data from the consumer affairs ministry as of 23 September indicates that retail prices for soybean, sunflower, and palm oils have risen by 14%, 19.5%, and 16.3% respectively over the past year. These price hikes have been attributed to a combination of elevated global commodity prices, increased freight costs, and the depreciation of the rupee.
India, which relies on imports for approximately 60% of its annual 26-million-tonne edible oil demand, remains highly susceptible to international market volatility. Import volumes surged to 1.48 million tonnes in July, a 35% increase from June, driven largely by higher shipments of palm and soybean oil. Global prices have also trended upward, with the FAO Vegetable Oil Price Index reaching its highest point since June 2022 in August.
Sudhakar Desai, president of the Indian Vegetable Oil Producers’ Association, noted that the duty cuts are expected to lower landed costs, potentially easing the burden on consumers. “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 HoReCa segments,” Desai said.
While the industry is focused on maintaining stable supplies and efficient distribution, Desai cautioned that the ultimate impact on retail prices will be influenced by broader economic factors, including international market trends, exchange rates, and domestic inventory levels. “A combination of timely imports, healthy inventories and supportive policy measures should help the market respond to seasonal demand while keeping affordability in focus at the same time supporting oilseed farmers,” he added.
