The Indian government lowers the custom duty on crude palm, soybean, and sunflower oils by 10%

To curb rising edible oil prices, the Indian government has reduced the basic customs duty on crude palm, soybean, and sunflower oils by 10 percentage points, bringing the effective duty down to 16.5%. This measure comes as retail prices have surged significantly - palm oil prices rose 34% year-on-year to ?134/litre, sunflower oil increased 30%, and soybean oil climbed 18% to ?147/litre.

Despite a record domestic mustard harvest, mustard oil prices remain elevated at over ?170/litre, up 25% from last year. The duty reduction aims to ease price pressures caused by global supply constraints and geopolitical factors affecting major edible oil-producing nations, though the full impact on retail prices may take several weeks to materialize. The government remains prepared to implement additional measures if global price volatility persists.

In September 2024, India raised import duties on vegetable oils to support domestic farmers, increasing the duty on crude palm, soybean and sunflower oils from 5.5% to 27.5% and setting refined oil duties at 35.75%. However, the policy failed as oilseed prices stayed below MSP and were lower than during duty-free periods, showing the duty hike didn't reverse the price decline. This repeated past experiences where tariffs alone couldn't stabilize farm incomes, highlighting the need for broader support measures beyond import restrictions.