India has taken a major step to curb rising food inflation by halving the basic import tax on crude edible oils from 20% to 10%, a move expected to lower consumer prices and support the domestic refining industry. The decision, announced on Friday, applies to crude palm oil, crude soybean oil, and crude sunflower oil, which are widely used in Indian kitchens.

With this cut, the total effective import duty on these oils will drop from 27.5% to 16.5%. The overall duty includes the basic import tax, a 5% Agriculture Infrastructure and Development Cess (AIDC), and a 10% Social Welfare Surcharge applied on the basic duty.

India, which imports over 70% of its edible oil needs, is the world’s largest buyer of vegetable oils. It sources palm oil mainly from Indonesia, Malaysia, and Thailand, while soybean and sunflower oils are imported from Argentina, Brazil, Russia, and Ukraine.

Industry experts have welcomed the move, stating that it benefits both consumers and the domestic edible oil industry. “This is a win-win situation for vegetable oil refiners as well as consumers, as local prices will go down due to the duty reduction,” said B.V. Mehta, executive director of the Solvent Extractors’ Association of India (SEA). Lower import taxes are expected to ease domestic prices, which have remained high in recent months due to global volatility and logistical disruptions.

Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage, noted that the reduction in duty is timely and necessary. He said, “The cut in the basic duty will bring down edible oil prices and help revive retail demand, which has been subdued.”

The government, however, has left the import tax on refined versions of these oils unchanged. Refined palm oil, soyoil, and sunflower oil still attract a 35.75% import duty. By widening the duty gap between crude and refined oils to 19.25%, the government is signaling its intent to encourage more imports of crude oils, which must be processed locally before being sold to consumers. This policy supports the domestic refining sector by boosting capacity utilization and generating employment.

The move is also expected to balance trade objectives with inflation control, as India continues to manage the impact of high global food prices on its large population. With retail food inflation still a concern, especially in the lead-up to the festive season, lowering duties on key food items like edible oils is seen as a proactive step by the government.

IT.