Price Drop Alert: India’s Edible Oil Tax Cut Aims to Tame Food Inflation

In a bold move to rein in soaring food prices, the Indian government has slashed the basic import duty on crude edible oils by half, effective immediately. The duty on crude palm oil, soyoil, and sunflower oil has been reduced from 20% to 10%, bringing the total effective import tax—including additional cesses—down to 16.5% from the previous 27.5%. This decisive step comes as edible oil prices have surged by up to 34% over the past year, straining household budgets and fueling food inflation.

 

India, which meets more than 70% of its vegetable oil demand through imports, hopes this tax cut will directly lower retail prices and revive subdued consumer demand. The move is also designed to boost imports from key suppliers such as Indonesia, Malaysia, Argentina, and Ukraine, ensuring steady domestic supplies. Importantly, the government has left the higher duty on refined oils unchanged at 35.75%, a strategic decision to support local refiners and encourage domestic value addition.

 

Industry leaders have welcomed the announcement, calling it a “win-win” for both consumers and the refining sector. The government has also extended the duty-free import window for yellow peas until March 2026, further aiming to stabilize food prices.

 

With inflation in edible oils and fats running in double digits, this tax reduction is expected to bring much-needed relief to Indian consumers and set the stage for a more stable food market in the months ahead.

 

Sources: Reuters, CNBC-TV18, Times of India