The Ministry of Consumer Affairs, Food & Public Distribution has announced a reduction in the Basic Customs Duty (BCD) on major imported crude edible oils. The duty on crude sunflower, soybean, and palm oils has been cut from 20% to 10%. This press release was issued on June 11, 2025.
This strategic adjustment directly addresses the escalating edible oil prices, which surged following a duty hike in September 2024 combined with concurrent increases in international market prices. The government’s decision aims to reduce the landed cost of these essential commodities, thereby lowering retail prices for consumers and contributing to a cooler overall inflation trend.
A key outcome of this duty reduction is the widening of the import duty differential between crude and refined edible oils, which will now stand at 19.25%, up from 8.75%. This enhanced differential is designed to actively encourage the utilization of domestic refining capacity and simultaneously discourage the import of refined oils, particularly refined Palmolein. The policy is expected to redirect demand towards crude edible oils, especially crude palm oil, which in turn will strengthen and revitalize India’s domestic refining sector while ensuring fair compensation for farmers.
To ensure that the full benefit of this duty reduction is immediately passed on to the end-consumers, the Department of Food and Public Distribution (DFPD) has issued a stern advisory to leading edible oil associations and industry stakeholders. A high-level meeting, chaired by the Secretary of the Department of Food and Public Distribution, was held where industry representatives were urged to adjust the Price to Distributors (PTD) and the Maximum Retail Price (MRP) in accordance with the lower landed costs without any delay.
Furthermore, the associations have been requested to advise their members to implement these immediate price reductions and to submit updated brand-wise MRP sheets to the Department on a weekly basis, utilizing a specific format provided by the DFPD. The Ministry stressed the imperative for timely transmission of this benefit throughout the supply chain to ensure a corresponding and immediate decrease in retail prices for Indian consumers.
This policy intervention follows a detailed review of the sharp rise in edible oil prices over the past year, which had placed significant inflationary pressure on households and contributed substantially to the country’s food inflation.
