Centre Reduces Customs Duty on Key Edible Oils to Ease Retail Prices

The Government of India has announced a reduction in Basic Customs Duty (BCD) on select imported crude and refined edible oils. This policy move is designed to cool domestic edible oil prices, shield consumers from higher international quotations, and help limit food-led inflationary pressures.

The changes have been notified through Customs Notification 31/2026, which amends Notification 45/2025 to revise the applicable BCD rates on major crude and refined edible oils.

Key Duty Changes at a Glance

The revised customs duty structure focuses on three major imported crude edible oils and their corresponding refined variants:

  • Crude Sunflower Oil

    • Earlier BCD: 10%
    • Revised BCD: Nil (0%)

  • Crude Soybean Oil

    • Earlier BCD: 10%
    • Revised BCD: 5%

  • Crude Palm Oil

    • Earlier BCD: 10%
    • Revised BCD: 5%

At the same time, the Government has brought down the BCD on the corresponding refined edible oils and has retained an import duty gap of 19.25% between crude and refined variants. This duty differential is a central element of the policy, aimed at supporting the domestic refining segment while still yielding lower consumer prices.

Effective date: The revised BCD rates have been notified vide Customs Notification 31/2026, amending Notification 45/2025, as per the communication dated 24 SEP 2026.

Policy Rationale Behind the Duty Reduction

Over the recent period, international quotations for edible oils have increased, leading to:

  • Higher landed cost for imported edible oils;
  • Upward pressure on domestic wholesale and retail prices;
  • Contribution to food-price inflation and overall inflationary trends.

Import duty is a critical element of the overall cost structure for imported edible oils. When global prices move up significantly, a high BCD can amplify the impact on final retail prices. By lowering the BCD on crude edible oils, the Government aims to partially offset the impact of higher international prices on domestic consumers.

Objectives of the Duty Rationalisation

The duty restructuring pursues multiple policy objectives:

  • Moderation of retail prices of edible oils for consumers;
  • Mitigation of inflationary pressures stemming from imported price shocks;
  • Support to domestic refining through maintenance of a 19.25% differential between crude and refined edible oils;
  • Protection of value addition within India by discouraging excessive imports of ready-to-use refined oils;
  • Stability in the edible oil supply chain, including procurement, processing, and distribution.

Impact on Crude Edible Oil Imports

Expected Reduction in Landed Cost

The reduction in BCD directly lowers the customs component included in the landed price.