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Government Reduces Import Duty on Crude Edible Oils to 10%

Written by: Team Angel OneUpdated on: Jun 2, 2025, 2:49 PM IST
India cuts basic customs duty on crude palm, soy, and sunflower oils from 20% to 10%, lowering overall import costs and widening the gap with refined oil duties.
Government Reduces Import Duty on Crude Edible Oils to 10%
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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.

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.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Published on: Jun 2, 2025, 2:49 PM IST

Team Angel One

Team Angel One is a group of experienced financial writers that deliver insightful articles on the stock market, IPO, economy, personal finance, commodities and related categories.

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