The Indian government has implemented comprehensive cuts across all edible oil categories with the revised rates coming into effect from September 24, 2026. The Basic Customs Duty (BCD) on crude sunflower oil has been slashed from 10% to zero, while crude soybean oil and crude palm oil duty has been reduced from 10% to 5%. For refined oils, refined soybean and palm oils duty has been lowered to 27.5% from 32.5%, and refined sunflower oil duty has been reduced to 22.5% from 32.5%. This represents a significant shift from the previous duty structure, with the government maintaining a duty differential of 19.25% between crude and refined edible oils to protect domestic refining operations and discourage excessive imports of refined products. As per Business Standard, the Food Ministry has issued an advisory to edible oil associations and industry stakeholders, urging them to pass on the benefits of lower import duties to consumers without delay. The total import duty on crude palm oil and crude soyoil will fall to 11% from 16.5%, while crude sunflower oil will attract a total duty of 5.5%, down from 16.5%.
The Indian government has reduced import duties on refined palm oil and soybean oil to 27.5%, according to reports from Business Standard and The Economic Times. This represents a significant policy shift in the country's edible oil import framework. The reduction applies specifically to refined versions of both palm oil and soybean oil, indicating a focus on processed rather than crude oil imports. The 27.5% duty rate represents a compromise between maintaining import protection while providing some relief to consumers and industry players. As per CNBC TV18, the duty cuts, effective September 24, are aimed at bringing down edible oil prices for consumers ahead of the festive season. The decision comes as India imported up to 16.65 million tonnes of edible oils in FY26, higher by 3% from 16.07 million tonnes in FY25, with imports covering about 60% of domestic edible-oil demand. According to Business Standard, India meets around 60 per cent of its total edible oil requirements through imports, making the duty reduction particularly significant for domestic price relief.
The cut in edible oil import duties could ease costs for makers of biscuits, noodles and fried snacks, though cheaper packs may not follow immediately, according to The Times of India. An analyst note from Nuvama identified bakeries and fried-snack makers as the clearest potential beneficiaries, given their use of palm oil, while also pointing to noodle makers and restaurant chains. Bikaji Foods International told TOI it expects its oil costs to fall by around 3-4%, with the benefit flowing into its purchases over the next few weeks, subject to market movements. However, COO Manoj Verma told TOI that the snack maker does not expect an immediate change in pack sizes or consumer pricing purely on account of this duty reduction. The eventual savings will depend on global oil prices, the rupee and how quickly companies run down stocks bought before the duty cut.
The Food Ministry has directed all edible oil companies to pass on the full benefit of lower import duties on cooking oils to consumers, as reported by Business Standard. The directive came hours after the government reduced the basic customs duty on crude sunflower oil from 10% to nil. The ministry has directed edible oil associations to advise their members to implement the corresponding price reductions without delay. In an official statement, the ministry said it has "issued an advisory to edible oil associations and industry stakeholders to ensure that the full benefit arising from the reduction in import duty is passed on to consumers." The ministry has directed edible oil associations to advise their members to implement the corresponding price reductions without delay. "The government will continue to monitor developments in international edible oil markets and domestic prices and will take appropriate measures, as necessary, to safeguard consumer interests while maintaining a balanced policy environment for farmers and the domestic edible oil industry," the statement said.
The Indian Vegetable Oil Producers' Association (IVPA) expects retail prices of cooking oils to come down following the government's decision to cut import duties on soyabean, palm and sunflower oils, according to Business Standard. Sudhakar Desai, President of IVPA, said the decision to reduce customs duties on specific edible-oil imports comes at an important juncture, particularly with the festive season approaching. As per IVPA, "Lower import duties should improve the landed costs of imported edible oils, which can provide some reduction in consumer prices." However, Desai noted that "The impact of any duty reduction will depend on several factors beyond customs duties, including international commodity prices, freight costs, exchange-rate movements, domestic availability and inventory levels." The association emphasized that "Greater flexibility to import sunflower oil and soyabean oil will shift demand away from palm oil, which is expected to be relatively expensive due to the implementation of B50 biofuel mandates and a cut down of the acreage expansion."
The duty reduction comes amid sharp rise in food inflation, with the Wholesale Price Index (WPI)-based food inflation rising to a 20-month high of 7.1% in August 2026 from 6.6% in July, according to latest data. The inflation surge is largely attributed to higher prices of fruits, vegetables, milk, spices, edible oils and sugar. While core WPI inflation eased marginally to 8.1% in August 2026 from a series high of 8.2% in July, it remained elevated with seven of the 21 subsectors reporting double-digit inflation. Edible oil prices in both India and international market surged significantly in the month of August, with Bank of Baroda economists expecting inflation rates to rise further to 6.8%, 12.5%, 18.7% and 11.1% in September 2026 for mustard oil, soya oil, sunflower oil and groundnut oil respectively. The government's move to reduce import duties aims to bring down food inflation ahead of the festive season between September and November. Sunflower oil, or sunoil, is India's third-largest imported edible oil after palm and soybean oil, with India importing around 2.5-3.3 million tonnes annually. As per Business Standard, India imports sunflower oil primarily from Russia and Ukraine, while palm and soybean oil are sourced largely from Indonesia, Malaysia, Argentina and Brazil. Some traders noted that "the steep cut in sunflower oil duty is also consistent with India's long-term strategic partnership with Russia," given India's steady imports of fertilisers and agricultural commodities from Russia.
