Government Cuts Customs Duty on Crude Palm, Soybean and Sunflower Oils

The Government of India on September 24 reduced the Basic Customs Duty on major edible oils to moderate domestic retail prices and provide relief to consumers, citing rising international prices and higher domestic landed costs. Under the revised duty structure, customs duty on crude palm oil and crude soybean oil was lowered from 10 per cent to 5 per cent, while the duty on crude sunflower oil was cut to zero.

The government also reduced import duties on refined edible oils. The measure comes as India remains heavily dependent on imports to meet its edible oil requirement, with foreign shipments accounting for 56 per cent of the country's total availability in 2024-25, compared to domestic production meeting 44 per cent.

Official figures show that import dependence has remained above 54 per cent in every oil year since 2016-17, when it stood at 60.3 per cent. Palm oil accounts for the largest share of edible oil imported into the country, with total inbound shipments of crude palm oil and RBD palmolein reaching 75.17 lakh tonnes during 2024-25.

During the same 2024-25 period, crude soybean oil imports reached 48.21 lakh tonnes, while crude sunflower oil imports stood at 28.92 lakh tonnes. Together, these three varieties comprise the vast majority of India's edible oil imports.

The duty revisions follow substantial retail price increases recorded across packed cooking oils over the past year. Sunflower oil recorded the sharpest rise, with its average retail price climbing by Rs 30.53 per kg, or 18.7 per cent, from Rs 161.93 per kg on October 1, 2025, to Rs 192.46 per kg on October 1, 2026.

Palm oil retail prices also climbed 14.3 per cent over the same period, increasing by Rs 21.95 per kg from Rs 131.65 to Rs 153.60 per kg. Soybean oil prices rose by 12.7 per cent, moving up by Rs 20.78 per kg from Rs 146.27 to Rs 167.05 per kg.

By comparison, monthly price changes between September 1 and October 1, 2026, were much smaller, with sunflower oil rising 0.1 per cent, soybean oil climbing 1.3 per cent, and palm oil increasing 2.1 per cent. While the reduced import duties lower landing costs, domestic retail prices are also influenced by international rates, the rupee-dollar exchange rate, freight, refining, packaging, distribution, and commercial margins.