Government Reduces Import Duty on Crude Edible Oils to 10%

According to the news report, the Government of India has reduced the basic customs duty on crude palm oil, crude soybean oil, and crude sunflower oil from 20% to 10%. The new rates were notified on May 30, 2025 and are effective immediately.

Effective Import Duty Now 16.5%

With this revision, the total effective import duty, which includes the Agriculture Infrastructure and Development Cess (AIDC) and the Social Welfare Surcharge, has come down from 27.5% to 16.5%. The Social Welfare Surcharge on these imports has also been reduced from 2.5% to 1.5%.

There is no change in the duty on refined edible oils, which remain at a basic customs duty of 32.5% and an effective rate of 35.75%.

Industry Associations

Industry bodies, including the Solvent Extractors’ Association of India (SEA) and the Indian Vegetable Oil Producers’ Association (IVPA) had raised concerns over the narrow duty gap between crude and refined edible oils. The earlier gap of 8.25% was seen as insufficient to protect local refining units from rising imports of finished products.

The revised structure increases the duty differential to 19.25%, addressing demands made over the past 6 months by SEA and IVPA.

Import Trends and Market Data

India imports over 50% of its edible oil requirement. In the 2023-24 oil marketing year, imports totalled 159.6 lakh tonnes, valued at ₹1.32 lakh crore. Palm oil is sourced mainly from Indonesia and Malaysia, while soybean oil comes from Brazil and Argentina. Sunflower oil is largely imported from Ukraine.

In 2023-24, refined palmolien made up more than 20% of palm oil imports. This figure rose to nearly 27% in the first half of 2024-25. On May 29, the cost-and-freight price of refined palm oil was $45 per tonne lower than crude palm oil.

Read more: India Considers Reducing High-End Car Import Duties to Boost Trade

Yellow Pea Imports

The government has also extended the duty-free import window for yellow peas until March 31, 2026. The earlier exemption was due to expire on June 1.

Conclusion

The changes are expected to alter the mix of edible oil imports and support domestic refining operations by making crude oil imports more economically viable.

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