The Centre has cut import duties on crude sunflower, soybean and palm oils to reduce landed costs, ease domestic edible oil prices and contain inflationary pressures.
New Delhi: The Government of India has reduced the Basic Customs Duty (BCD) on major imported crude edible oils in a move aimed at moderating domestic edible oil prices and providing relief to consumers amid a sharp rise in international edible oil prices.
Under the revised duty structure, the BCD on crude sunflower oil has been reduced from 10% to nil, while the duty on crude soybean oil and crude palm oil has been lowered from 10% to 5%.
The government has also reduced the applicable BCD on the corresponding refined edible oils while retaining a 19.25% import duty differential between crude and refined edible oils.
The duty rationalisation takes into account the increase in international edible oil prices and its impact on domestic landed costs and retail prices.
Import duties form a significant component of the landed cost of imported edible oils and therefore influence prices in the domestic market. The reduction in duties on crude oils is expected to lower import costs and facilitate the transmission of the benefit through the domestic supply chain.
The government said the measure is intended to provide consumers with relief while helping contain food-price inflation and broader inflationary pressures.
Alongside consumer relief, the government has retained the duty differential between crude and refined edible oils.
The differential is aimed at encouraging the utilisation of domestic refining capacity and discouraging excessive imports of refined edible oils. The policy is also expected to support domestic refiners and encourage greater value addition within the country.
The move comes at a time when fluctuations in global edible oil prices have increased pressure on domestic cooking oil prices, affecting household food budgets.
The government has also issued an advisory to edible oil associations and industry stakeholders to ensure that the benefit from the reduction in import duties reaches consumers.
Industry stakeholders have been asked to immediately revise Price to Distributors (PTD) and Maximum Retail Prices (MRP) in line with the reduction in landed costs.
Edible oil associations have also been requested to advise their members to implement the corresponding price reductions without delay.
The government said it would continue to monitor developments in international edible oil markets and domestic prices.
It added that further measures could be considered, if necessary, to protect consumer interests while maintaining a balanced policy environment for farmers and the domestic edible oil industry.
The duty changes are therefore aimed at balancing two objectives: providing consumers with relief from elevated edible oil prices while retaining incentives for domestic refining and value addition.
