Has the Centre Cut Customs Duty on Crude Edible Oils?
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Synopsis
In a strategic move to combat rising edible oil prices, the Centre has reduced customs duty on crude edible oils. This article explores the implications of this decision, including its potential impact on domestic prices and consumer relief.
Key Takeaways
- Customs duty on crude edible oils has been reduced from 20% to 10%.
- The import duty differential has increased to promote domestic refining.
- Consumers are expected to see lower retail prices.
- Industry stakeholders are urged to pass on benefits to consumers.
- This decision aims to stabilize edible oil prices amidst inflation.
New Delhi, June 11 (IANS): The Centre has made a significant move by slashing the basic customs duty on crude edible oils, which includes crude sunflower, soybean, and palm oils, from 20 percent to 10 percent. This decision aims to lower prices in the local market, as stated in an official announcement made on Wednesday.
The lowering of customs duty has also caused the import duty gap between crude and refined edible oils to increase from 8.75 percent to 19.25 percent. This adjustment is expected to boost the utilization of domestic refining capacities and curtail imports of refined oils.
According to the Ministry of Consumer Affairs, Food & Public Distribution, this change is intended to combat the rising prices of edible oils, which have escalated due to a duty hike in September 2024 and corresponding increases in international prices. An advisory has been sent to edible oil associations and industry stakeholders to guarantee that consumers receive the full advantage of the reduced duty.
The import duty on edible oils significantly impacts the landed cost and, consequently, domestic prices. By reducing the import duty on crude oils, the government seeks to lower the landed cost and retail prices of edible oils, providing relief to consumers while aiding in controlling overall inflation. Additionally, the reduced duty will promote domestic refining and ensure fair compensation for farmers.
This revised duty structure will deter the import of refined palmolein and shift demand towards crude edible oils, particularly crude palm oil, thereby revitalizing the domestic refining sector. This crucial policy intervention not only creates a level playing field for domestic refiners but also contributes to stabilizing edible oil prices for Indian consumers.
A meeting was convened with major edible oil industry associations under the leadership of the Secretary of the Department of Food and Public Distribution. An advisory was issued urging them to relay the benefits of this duty reduction to consumers. Stakeholders in the industry are expected to adjust prices to distributors (PTD) and the maximum retail price (MRP) immediately based on the lower landed costs.
Associations have been encouraged to inform their members to implement prompt price reductions and to weekly share updated brand-wise MRP sheets with the department. The DFPD provided a format for the edible oil industry to communicate the reduced MRP and PTD data.
Timely transmission of this benefit through the supply chain is crucial to ensure that consumers witness a corresponding drop in retail prices, as emphasized in the statement.
This decision follows a thorough review of the rapid increase in edible oil prices post last year’s duty hike, which exerted significant inflationary pressure on consumers, resulting in soaring retail edible oil prices and contributing to increased food inflation.
Point of View
The recent duty reduction on crude edible oils represents a proactive step by the government to stabilize prices amidst increasing inflation. This policy not only fosters domestic production but also assures consumers of lower prices in the face of fluctuating international markets. It reflects a commitment to maintaining food affordability and supporting local farmers.
NationPress
12/06/2025
Frequently Asked Questions
What is the recent change in customs duty on edible oils?
The Centre has reduced the customs duty on crude edible oils from 20% to 10%.
What types of oils are affected by this duty reduction?
The reduction applies to crude sunflower, soybean, and palm oils.
How will this change impact consumers?
Consumers can expect a decrease in retail prices of edible oils as a result of the reduced customs duty.
What is the significance of the increased import duty differential?
The increased differential between crude and refined oils encourages domestic refining and reduces reliance on imported refined oils.
How is the government ensuring that consumers benefit from this change?
An advisory has been issued to industry stakeholders to ensure that the benefits of the duty reduction are passed on to consumers.
