The Indian government has extended the lower import duty for palm, soybean, and sunflower oils until March 31, 2025. This extension is a part of the government’s efforts to ensure the availability of these essential commodities and to control their retail prices. Additionally, the exemption on the import duty for masur dal (lentils) has also been extended by one more year, aligning with the same date. The initial lower import duty structure on these oils was originally set to expire in March 2024, but this move extends it further.
To alleviate the burden on consumers, the Narendra Modi government earlier reduced the import duty on refined soybean and sunflower oils from 17.5% to 12.5% on June 15. Following this reduction, the effective duty on refined edible oils, inclusive of a social welfare cess, was set at 13.7%, while the effective duty on major crude edible oils was 5.5%. This reduced duty arrangement for refined soybean and sunflower oil will be effective until March 31, 2024.
These strategic decisions come in the wake of efforts to manage the prices and supply of essential food commodities in the country. The government’s announcement to reduce customs duty on edible oil also led to price reductions by companies. In May 2023, Mother Dairy, for instance, reduced the maximum retail price of its edible oils sold under the ‘Dhara’ brand by 15 to 20 rupees per liter. Similar price cuts were observed in other brands like Fortune and Gemini.
The Solvent Extractors’ Association of India (SEA) has estimated that India’s import of edible oils—palm, soybean, and sunflower—is expected to reach a record 17 million metric tons (MMT) in the current year. These measures, therefore, play a significant role in ensuring the availability and affordability of these essential commodities for the Indian population.