The Central Government has reduced the Basic Customs Duty (BCD) on major imported crude edible oils with an aim to control domestic edible oil prices, provide relief to consumers and reduce inflationary pressure arising from sharp rise in international edible oil prices.
Under this, BCD on crude sunflower oil has been reduced from 10 percent to zero, while BCD on crude soybean oil and crude palm oil has been reduced from 10 percent to 5 percent. The government has also reduced the BCD applicable on related refined edible oils. However, the difference in import duty between crude and refined edible oils has been retained at 19.25 per cent.
The rationalization of import duty has taken into account the increase in international edible oil prices and consequent increase in cost and retail prices in the domestic market. Import duty is a significant component of the cost of imported edible oils and impacts domestic market prices.
The reduction in BCD on crude edible oils is expected to reduce their cost in the domestic market and help the benefits reach consumers through the domestic supply chain. The move is aimed at contributing to controlling food prices and overall inflationary pressures while providing relief to consumers.
The government has maintained the duty differential between crude and refined edible oils to promote utilization of domestic refining capacity and discourage excessive import of refined edible oils. This is expected to continue the process of value addition in the country while providing a more level playing field for domestic researchers.
Advice to industry for consumer benefit
The government has issued advisories to edible oil associations and industry stakeholders, so that the full benefits of the reduction in import duty can be passed on to consumers.
Industry stakeholders have been requested to immediately revise the Price to Distributors (PTD) and Maximum Retail Price (MRP) in line with cost reduction. Edible oil associations have also been requested to advise their members to implement the respective price cuts without delay.
The government will continue to monitor developments in international edible oil markets and domestic prices. Also, appropriate measures will be taken as needed while maintaining a balanced policy environment for farmers and the domestic edible oil industry to protect the interests of consumers.