Centre has reduced the Basic Customs Duty (BCD) on key imported crude edible oils, sunflower, soybean, and palm, from 20% to 10% in a move aimed at bringing down retail prices and easing pressure on consumers. This decision effectively widens the duty gap between crude and refined edible oils from 8.75% to 19.25%, boosting domestic refining and cutting the cost of imports.
The reduction comes after a steep rise in edible oil prices triggered by last year’s duty hike and rising global prices. The government hopes the new rates will lower the landed cost of these oils, which in turn could help cool retail inflation.
The revised duty structure will discourage the import of refined oils like Palmolein and shift demand towards crude oils, especially crude palm oil. This is expected to strengthen domestic refining capacity and support local processors while also benefiting farmers.
An advisory has been issued to edible oil companies and industry associations, asking them to immediately pass on the benefits of the reduced import duty to consumers. Companies are expected to revise the Price to Distributors (PTD) and Maximum Retail Prices (MRP) accordingly.
A high-level meeting chaired by the Secretary of the Department of Food and Public Distribution was held with industry stakeholders, where they were asked to share updated, brand-wise MRP details every week. The government has provided a standard format for reporting revised prices.
The timely rollout of the new rates across the supply chain is crucial to ensure that the reduced costs are reflected on retail shelves. The move is being seen as a key step to bring relief to households struggling with rising food costs.
The Centre’s decision follows a detailed review of the edible oil market and comes as part of efforts to tackle food inflation. The government aims to provide relief to consumers and support the broader economy by encouraging domestic refining and bringing down the prices of essential cooking oils.
