Government Reduces Edible Oil Import Duty; Crude Palm and Soybean Oil Rate Cut to 5%

India imports nearly two-thirds of the vegetable oil it consumes, with palm, soybean and sunflower oil making up a large part of these imports, as per news reports. Supplies mainly come from Malaysia, Indonesia, Argentina, Russia and Ukraine. 

The government has now lowered import duties on these oils, with the changes taking effect from September 24, 2026. The decision comes before the September-November festive period, when demand for edible oils rises. 

Crude Oil Duties 

Crude palm oil and crude soybean oil will now attract a 5% basic customs duty, against 10% previously. After including other applicable levies, the total import duty on both oils will stand at 11%, compared with 16.5% earlier. 

For crude sunflower oil, the basic customs duty has been removed altogether. Its rate has fallen from 10% to zero, taking the total import duty down to 5.5% from 16.5%. 

Refined Oil Rates 

The government has also reduced duties on refined edible oils. The basic customs duty on refined palm oil and refined soybean oil has been cut to 27.5% from 32.5%. 

For refined sunflower oil, the duty has been reduced to 22.5% from 32.5%. Edible oil imports continue to attract the Agriculture Infrastructure and Development Cess and Social Welfare Surcharge. 

Price Pressure 

Vegetable oil prices in India have increased nearly 20% over the past year. Since the country relies heavily on overseas supplies, international commodity prices, freight costs, and exchange rates influence prices in the domestic market. 

The reduction in import duty lowers the tax component of imported oil and is expected to reduce its landed cost. The change comes at a time when demand is set to increase for household cooking as well as festive food production. 

Demand During Festivals 

Edible oil consumption typically rises during festivals as demand increases for sweets, snacks and fried foods. The duty changes therefore come ahead of a period of higher consumption. 

Refiners had held back some purchases while anticipating a duty reduction, according to the information provided. Imports are expected to adjust following the government's notification. 

Read More: ADB Revises India Growth Outlook; FY27 Forecast at 7%, FY28 at 7.1%! 

Conclusion 

The latest changes reduce the import duty on major crude and refined edible oils. Crude sunflower oil records the largest reduction, while palm and soybean oil also see lower rates from September 24, 2026. 

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