Edible Oil Import Duty Cut From September 24: Know New Rates for Palm, Soybean, Sunflower Oil
The Central government has reduced the basic customs duty (BCD) on several crude and refined edible oils, including palm, soybean and sunflower oil. The revised rates come into effect from September 24, with the biggest reduction being the removal of BCD on crude sunflower oil.
The Central government has reduced the basic customs duty (BCD) on several crude and refined edible oils, including palm, soybean and sunflower oil. The revised rates come into effect from September 24, with the biggest reduction being the removal of BCD on crude sunflower oil.
The move is expected to lower the import cost of edible oils and could ease pressure on domestic prices. However, the extent and timing of any reduction in retail prices will depend on global oil prices, exchange rates and how much of the duty benefit is passed through the supply chain. Crude Above USD 100 Could Push Inflation Towards 6%; RBI May Raise Rates by 50 Bps This Fiscal: Kotak Securities.
New Customs Duty Rates on Edible Oils
Under the revised structure, the BCD on crude soybean oil and crude palm oil has been reduced from 10% to 5%.
For refined varieties, the duty on refined soybean oil and refined palm oil has been cut from 32.5% to 27.5%.
Crude sunflower oil has received the largest reduction. Its BCD has been reduced from 10% to nil, effectively allowing imports at zero basic customs duty.
The duty on refined sunflower oil has also been lowered, from 32.5% to 22.5%.
| Edible Oil | Earlier BCD | New BCD |
|---|---|---|
| Crude Soybean Oil | 10% | 5% |
| Crude Palm Oil | 10% | 5% |
| Refined Soybean Oil | 32.5% | 27.5% |
| Refined Palm Oil | 32.5% | 27.5% |
| Crude Sunflower Oil | 10% | 0% |
| Refined Sunflower Oil | 32.5% | 22.5% |
The changes were notified by the Department of Revenue through Notification No. 31/2026-Customs dated September 23, 2026, and became effective from September 24.
Why Has the Government Cut Edible Oil Import Duty?
The duty reduction comes amid elevated edible oil prices and ahead of the festive season, when demand for cooking oil typically increases. India relies significantly on imports to meet its edible oil requirement. Palm oil, soybean oil and sunflower oil form a major part of the country's imported edible oil basket. Lower customs duties can reduce the landed cost of imported oil. This could subsequently ease pressure on domestic prices, although the final impact on consumers will depend on several factors across the supply chain. Oil Prices Face Upside Risks as Global Supply Disruptions Deepen: Report.
Will Cooking Oil Prices Fall?
The reduction in import duty creates scope for lower edible oil prices, but it does not automatically mean that retail prices will fall by the same amount. Global commodity prices, freight costs, the rupee's exchange rate, importer margins, refining costs and distributor and retailer margins can all affect the final price paid by consumers. The government has also sought to ensure that the benefit of the lower duty reaches consumers, according to a government statement cited in reports on the notification.
Impact on Palm, Soybean and Sunflower Oil
Crude palm and soybean oil imports will now attract half the earlier BCD, falling from 10% to 5%. The reduction is also intended to lower the cost advantage between importing crude and refined oils and can have implications for domestic refining activity. Sunflower oil has seen the most significant change, with the government eliminating the BCD on crude imports altogether. Refined sunflower oil has also received a 10-percentage-point reduction.
India’s Dependence on Imported Edible Oil
India is one of the world's largest vegetable oil importers and meets a substantial share of its consumption through overseas supplies. Key sources include Malaysia and Indonesia for palm oil, while soybean and sunflower oil supplies also come from countries such as Argentina, Russia and Ukraine. Because of this import dependence, international edible oil prices, currency movements and import duties have a direct bearing on domestic cooking oil prices.
The latest customs duty reduction is therefore aimed at lowering import costs at a time when consumers and the edible oil industry are facing price pressures. The actual benefit at the retail level will become clearer as the revised duty structure works through the supply chain.
(The above story first appeared on LatestLY on Sep 24, 2026 07:25 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).