India reduces basic customs duty on soya bean, palm and sunflower oils

NEW DELHI: India has reduced the basic customs duty (BCD) on various edible oils, including soya bean oil, palm oil and sunflower oil, with the changes coming into effect from September 24.

According to the notification, the BCD on crude soya bean oil and crude palm oil has been reduced from 10% to 5%, while the duty on refined soya bean oil and refined palm oil has been cut from 32.5% to 27.5%.

The government has also reduced the BCD on crude sunflower oil from 10% to nil, while the duty on refined sunflower oil has been lowered from 32.5% to 22.5%.

Earlier in 2025, India’s central government had reduced the Basic Customs Duty (BCD) on crude edible oils, namely crude sunflower, soya bean and palm oils, from 20% to 10%. At that point, the import duty differential between crude and refined edible oils was 8.75% to 19.25%.

"Import duty on edible oils is one of the important factors that impact the 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," the Ministry of Consumer Affairs, Foods and Public Distribution of India said.

Earlier in August 2026, India’s food inflation underwent a shift in its composition, with protein-rich items, processed foods and edible oils emerging as major contributors to price pressures, even as the persistence of El Niño conditions raises risks for crop yields and food prices, noted the Monthly Economic Report of August 2026 released by India’s finance ministry.

Consumer Food Price Index (CFPI)-based inflation rose to 5.52% in July 2026, from 5.32% in June, although the pace of increase moderated compared with the previous two months.

The shift comes as several food items, including milk, chicken, mutton, fish, refined oil, onion and arhar/tur, recorded notable inflation in July compared with the previous month, according to the review. The review flagged rising global vegetable oil prices as a potential source of persistent inflationary pressure for India, given the country’s dependence on imports of crude palm, soya bean and sunflower oils.

The report attributed the global tightening in vegetable oil supplies partly to the diversion of palm, soya bean and rapeseed oils towards biofuel production as an alternative to petroleum diesel.

The report cautioned that, "The persistence of El Niño raises the risk of a weaker or uneven monsoon and, consequently, of pressure on crop yields and food prices." At the same time, the review also cautioned against drawing a direct one-to-one link between El Niño and agricultural outcomes, pointing to irrigation, procurement and food stock mechanisms as important buffers.

(With inputs from ANI/RSS)