Will Cooking Oil Prices Decrease with the Government's Duty Cut?
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Synopsis
In a bid to alleviate household financial strain, the Indian government has slashed customs duties on key cooking oils. This change is expected to lower market prices and support domestic oil processing industries.
Key Takeaways
- Customs duty on key cooking oils cut to 10%.
- Prices expected to decrease, benefiting households.
- Support for domestic oil processing industries.
- Overall import duty reduced to 16.5%.
- Government monitoring inflation closely.
New Delhi, May 31 (NationPress) The government has significantly reduced the basic customs duty on crude palm oil, crude soybean oil, and crude sunflower oil from 20 percent to 10 percent in an effort to lower cooking oil prices in the local market and alleviate pressure on household finances.
This duty reduction has taken effect immediately, as the government aims to decrease edible oil prices, which surged by up to 17.4 percent in April, despite a decline in retail inflation.
The change is also projected to support domestic oil processing sectors by lowering raw material costs.
With the 10 percent duty reduction, the total import duty on these three oils will effectively decrease from 27.5 percent to 16.5 percent.
In September 2024, a 20 percent basic customs duty was levied on crude and refined vegetable oils. Following the recent changes, crude palm oil, crude soy oil, and crude sunflower oil now face a 27.5 percent import duty, a rise from the previously imposed 5.5 percent, while refined grades incur a 35.75 percent customs duty.
India's annual edible oil imports are estimated to be around 15-16 million tonnes, which constitutes a significant portion of the country's overall edible oil consumption, approximated between 23 and 25 million tonnes.
India imports palm oil from countries like Indonesia, Malaysia, and Thailand, while soyoil and sunflower oil are sourced from Argentina, Brazil, Russia, and Ukraine.
The Centre is actively monitoring inflation and recently announced stock limits on wheat for wholesale traders and retailers nationwide to curb hoarding and speculation that contributes to inflationary pressures.
The new order sets a stock limit of 3,000 metric tonnes (MT) for wholesale traders and 10 MT for retail traders.
For bid chain retailers, the stock limit is capped at 10 MT per retail outlet, with a maximum combined total of (10 multiplied by total number of outlets) MT.
Processors have a wheat stock limit fixed at 70 percent of their monthly installed capacity, multiplied by the remaining months of fiscal year 2025-26.
Point of View
It is essential to recognize the government's proactive approach in tackling inflation through strategic changes in import duties. This not only aims to ease the burden on consumers but also supports domestic industries, reflecting a balanced focus on economic stability.
NationPress
21/09/2025
Frequently Asked Questions
What is the new customs duty on cooking oils?
The customs duty on crude palm oil, crude soybean oil, and crude sunflower oil has been reduced from 20% to 10%.
How will this affect cooking oil prices?
The reduction in customs duty is expected to lower cooking oil prices in the local market, providing relief to consumers.
What is the total import duty now?
With the new duty cut, the total import duty on these oils will decrease to 16.5% from 27.5%.
How much edible oil does India import annually?
India's edible oil imports are estimated to be around 15-16 million tonnes annually.
What measures is the government taking to control inflation?
The government has imposed stock limits on wheat to prevent hoarding and speculation that drives up inflation.
