The central government has eased import duties on big edible oils ahead of the festive season in an attempt to reduce domestic cooking oil prices and to ease domestic consumers’ food costs.
The Basic Customs Duty (BCD) on crude sunflower oil has been reduced from 10% to nil, while the duty on crude palm oil and crude soybean oil has been cut from 10% to 5%. The government has also reduced duties on refined edible oils.
The new duty structure came into effect from September 24, 2026. At a time when edible oil prices have been under pressure and demand is expected to rise during the September-November festive period.
Edible Oil Import Duty: What has changed?
The government has made a lot of changes in the import duty structure for crude and refined edible oils.
| Edible Oil | Earlier BCD | New BCD |
|---|---|---|
| Crude Sunflower Oil | 10% | 0% |
| Crude Palm Oil | 10% | 5% |
| Crude Soybean Oil | 10% | 5% |
| Refined Sunflower Oil | 32.5% | 22.5% |
| Refined Palm Oil | 32.5% | 27.5% |
| Refined Soybean Oil | 32.5% | 27.5% |
The government said the duty changes are intended to moderate domestic edible oil prices, reduce inflationary pressure, and provide relief to consumers. It has also maintained a 19.25% duty differential between crude and refined edible oils to support domestic refining.
Why could cooking oil prices fall?
India relies on imports to meet its edible oil requirements. Industry estimates by Business Standard indicate that around 60% of India's edible oil needs are met by imports.
Therefore, import duties have a direct impact on the landed cost of edible oils. Lower customs duties can reduce the cost for importers and refiners, so that the benefit can move through the supply chain to retailers and consumers.
The government has also advised edible oil associations and industry stakeholders to ensure that the benefits of the duty reduction in the industry are passed on to consumers.
However, the extent and timing of any retail price reduction will depend on international edible oil prices, freight costs, currency movements, inventory levels and how quickly lower import costs are reflected in wholesale and retail markets.
Festive Season Demand Adds To Significance
The duty reduction comes just ahead of India’s major festive period. The demand for cooking oils typically increases during festivals as households, sweet manufacturers, restaurants and food businesses buy larger quantities for cooking and preparing snacks and sweets.
Industry reports had earlier highlighted concerns about rising edible oil costs ahead of the festive season. International prices, freight costs and the rupee’s movement have all been important factors affecting India’s edible oil import costs.
The latest duty cut could therefore provide some relief at a time when consumption is expected to increase.
Sunflower Oil Gets The Biggest Duty Reduction
Among the biggest edible oils, crude sunflower oil has received the biggest reduction in basic customs duty and has been cut from 10% to zero.
The effective import duty on crude sunflower oil has also fallen drastically, after taking into account the relevant components. The effective duty on crude palm and soybean oil in total has dropped from 16.5% to 11% in the government's announcement, while on crude sunflower oil from 16.5% to 5.5%.
The changes would have made imported sunflower oil relatively more competitive, depending on international prices and supply conditions.
Impact On Consumers And Farmers
This will be the immediate question for consumers: how much cheaper cooking oil packets will be available at retail stores.
Industry representatives are predicting the duty reduction will reduce landed costs, and in turn retail prices will fall.
At the same time, the policy has implications for domestic oilseed farmers. Lower import duties could make imported oils more competitive than domestic oilseeds. The New Indian Express reported that it might also discourage some farmers from expanding oilseed production during the rabi season.
The government therefore has the challenge of balancing consumer price relief with incentives for domestic oilseed production.
What will happen in the future?
The impact of the duty cut will become clearer as new consignments come into the market and refiners adjust their pricing. Global palm, soybean and sunflower oil prices will remain important variables.
The key to households is that the reduction in import duties means cooking oil prices can soften, but perhaps not so much at the retail level.
With the holiday season coming up soon, customers will be watching retail prices of sunflower, palm and soybean oils closely as the lower import duty structure moves through the market.
