Centre cuts import duty on crude sunflower, soybean and palm oil

New Delhi, Sep 24 (UNI) 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 per cent to nil, while the duty on crude soybean oil and crude palm oil has been cut from 10 per cent to 5 per cent. The government has also reduced the applicable BCD on the corresponding refined edible oils while maintaining an import duty differential of 19.25 per cent between crude and refined edible oils.

The reduction in import duty is expected to lower the landed cost of imported crude edible oils, potentially providing room for lower prices across the domestic supply chain. Import duties form a part of the landed cost of imported edible oils and therefore have a bearing on domestic market prices.

The government said the latest duty rationalisation takes into account the increase in international edible oil prices and its impact on domestic landed and retail prices. The Centre expects the reduction in BCD to facilitate the transmission of lower import costs through the supply chain and help contain food-price inflation. Alongside the duty reduction, the government has issued an advisory to edible oil associations and industry stakeholders to ensure that the benefit of lower import duties is passed on to consumers.

Industry stakeholders have been asked to immediately revise their Price to Distributors (PTD) and Maximum Retail Price (MRP) in line with the reduction in landed costs. Edible oil associations have also been asked to advise their members to implement the corresponding price reductions without delay. While cutting duties on crude edible oils, the government has retained the 19.25 per cent duty differential between crude and refined edible oils.

The government said the differential is intended to encourage the utilisation of domestic refining capacity and discourage excessive imports of refined edible oils. The policy is also aimed at providing a more level playing field for domestic refiners while supporting value addition within the country. The government said it will continue to monitor developments in international edible oil markets as well as domestic prices. Further measures may be considered, if required, to protect consumer interests while maintaining a balanced policy environment for farmers and the domestic edible oil industry.

For consumers, the key impact to watch will now be whether the lower import duty is fully reflected in retail prices of sunflower, soybean and palm oil in the coming days.

UNI VK AAB