New Delhi, India — In a significant move to combat rising domestic prices and ensure adequate supply for the upcoming festive season, the Indian government has announced a reduction in customs duties on various edible oils. The revised rates, effective September 24, 2026, target crude and refined palm, soybean, and sunflower oils.
Vegetable oil prices in India have seen a nearly 20% increase over the past year. With demand typically surging between September and November due to major festivals involving increased consumption of sweets, snacks, and fried foods, the duty cuts are expected to provide much-needed relief to consumers and the industry.
Revised Duty Structure Highlights
- Crude Palm Oil and Crude Soybean Oil: The basic customs duty has been halved from 10% to 5%. Including the Agriculture Infrastructure and Development Cess and Social Welfare Surcharge, the total import duty will now be 11%, down from 16.5%.
- Refined Palm Oil and Refined Soybean Oil: Duties have been reduced from 32.5% to 27.5%.
- Crude Sunflower Oil: The basic customs duty has been eliminated entirely, moving from 10% to nil. The total import duty, including cess and surcharge, will now stand at 5.5%, a substantial drop from 16.5%.
- Refined Sunflower Oil: Duties have been lowered from 32.5% to 22.5%.
Industry participants anticipate that these duty reductions will lower landed costs for importers, thereby encouraging increased imports. Analysts suggest that sunflower oil, with its sharper duty reduction, is particularly poised to benefit from this policy change.
Impact on India's Edible Oil Market
India is a major importer of vegetable oil, sourcing nearly two-thirds of its requirements from countries such as Malaysia, Indonesia, Argentina, Russia, Ukraine, and Brazil. The Solvent Extractors' Association estimates that India's edible oil import bill is projected to rise by 9% to ₹1.75 lakh crore in the current marketing year ending October, driven by higher volumes and a depreciating rupee.
Refiners who had reportedly delayed purchases in anticipation of these cuts are now expected to ramp up imports to meet the festive demand. However, the ultimate impact on retail prices will also be influenced by fluctuating international commodity prices, freight costs, exchange rates, and domestic availability and inventories.