The Government of India has reduced the Basic Customs Duty (BCD) on major imported crude edible oils in a move aimed at moderating domestic prices and providing relief to consumers amid firm international edible oil prices.
The BCD on crude sunflower oil has been reduced from 10 per cent to nil, while the duty on crude soybean oil and crude palm oil has been lowered from 10 per cent to 5 per cent. The Government has also reduced the applicable duty on corresponding refined edible oils while retaining a 19.25 per cent duty differential between crude and refined oils.
The duty rationalisation comes against the backdrop of higher international edible oil prices, which have increased landed costs and exerted pressure on domestic retail prices. Since import duties constitute an important component of the landed cost of edible oils, the reduction is expected to lower costs across the supply chain.
The Government expects the duty cut to help ease consumer prices and contain food inflation. At the same time, maintaining the duty differential between crude and refined oils is intended to encourage utilisation of domestic refining capacity, promote value addition within the country and limit excessive imports of refined edible oils.
Edible oil associations and industry stakeholders have been advised to ensure that the benefit of lower import duties is passed on to consumers. Companies have been asked to revise their Price to Distributors (PTD) and Maximum Retail Price (MRP) in line with the reduction in landed costs.
Industry associations have also been urged to advise their members to implement corresponding price reductions without delay.
The Government said it will continue to monitor international edible oil markets and domestic prices and take further measures, where necessary, to protect consumer interests while maintaining a balanced policy environment for farmers and the domestic edible oil industry.