NEW DELHI: The Centre has reduced the basic customs duty (BCD) on major imported crude edible oils to help moderate domestic edible oil prices amid inflationary pressures and provide relief to consumers. However, the move may discourage domestic farmers from growing oilseed crops in the rabi season.
The BCD on crude sunflower oil has been cut from 10% to nil and on crude soybean and palm oil from 10% to 5%, the Ministry of Consumer Affairs, Food and Public Distribution said in a statement on Thursday. The government has reduced the BCD on refined edible oils while maintaining an import duty differential of 19.25% between crude and refined oils.
The steeper duty cut on sunflower oil makes it more affordable. India remains heavily dependent on imports to satisfy a substantial portion of its edible oil requirements, making the domestic market sensitive to international prices and global supply conditions.
The increased flexibility for importing sunflower and soybean oils is expected to shift demand away from palm oil, which may become relatively expensive due to the implementation of B50 biofuel mandates.
The government has issued an advisory to edible oil associations and industry stakeholders to ensure that the benefits of the import duty reduction are passed on to consumers.
“Lower import duties should improve the landed costs of imported edible oils, which can lead to a reduction in consumer prices,” said Sudhakar Desai, president of the Indian Vegetable Oil Producers’ Association (IVPA). “At IVPA, we have been advocating for an import quota on zero-duty imports from SAFTA countries,” he said.