In a move aimed at curbing food inflation and providing respite to consumers, the Indian government has slashed import duties on crude edible oils by 10%, a decision that is expected to reduce retail prices by 5-6% in the coming weeks.
The revised import duties will take effect immediately and are part of the Centre’s ongoing efforts to stabilize food prices amidst global supply disruptions and local market volatility.
Industry Experts Predict Relief Before Festive Season
According to officials from the Solvent Extractors’ Association of India (SEA), the benefit of this duty cut will likely be visible to end consumers before the upcoming festive season. The reduction covers crude palm oil, crude soybean oil, and crude sunflower oil, whose duties have now been lowered from 27.5% to 17.5%.
Previously, these items had witnessed duties as high as 35.75% in some cases. The government had already lowered those in phases over the past year to combat inflation. With this latest reduction, consumers may soon see marked-down prices at retail stores.
Refined Oils Excluded from Benefit, Prices to Remain High
While the cut brings good news for crude edible oil users, refined oil consumers will not see immediate relief. The duty on refined edible oils remains at 32.5%, and no revisions have been announced so far. The continued high cost of refined oils is expected to sustain market price pressures in that segment.
Import and Domestic Impact: Analysts Expect Price Correction
Trade experts from the edible oil industry suggest that the new changes could reduce wholesale market pressure by 3-4%, especially as the refining sector’s capacity utilization is projected to increase by 20-25% due to better supply and margins. This is likely to stabilize availability and improve profit margins for refiners.
Kumar Haldar, Managing Director of Haldar Ventures Ltd., noted that the 10% cut in crude oil import duty will bring domestic prices closer to international benchmarks, encouraging importers to pass on the benefit to consumers.
No Change in Tariff on Rapeseed Oil
The tariff on rapeseed (mustard) oil, another widely used cooking medium in India, remains unchanged at 35.75%. This means consumers using this variant won’t benefit from the current round of reforms. However, a broader market correction driven by competition among oil types may still help prices normalize.
