Business Desk :- The Central Government has reduced the basic custom duty on edible oil. According to the Finance Ministry, the new rates will be applicable from September 24, 2026. The government has reduced the custom duty on crude soya and crude palm oil from 10% to 5%.
At the same time, duty on refined soya and refined palm oil has been reduced from 32.5% to 27.5%. Custom duty on crude sunflower oil has been reduced from 10% to zero.
Big reduction on refined sunflower oil also
The government has also reduced the custom duty on refined sunflower oil. Its rate has been reduced from 32.5% to 22.5%. These cuts are expected to reduce the import cost of edible oils. Customers may also benefit from this in the future and may see relief in the prices of cooking oil.
However, it is not certain how much the prices will drop in the retail market immediately after the custom duty reduction. The relief provided to customers will also depend on how companies and traders pass on the benefits of duty reduction in the supply chain.
Which oil is most used in India?
In India, many types of edible oils are used according to different areas and needs. Palm oil is considered the cheapest edible oil. It is used extensively in outside food, namkeen, biscuits and dhabas.
Soybean oil is popular for daily cooking in Indian households as it is light and relatively cheap. At the same time, mustard oil is used more in North and East India. It has a distinct identity due to its pungent taste and alleged health properties.
There is also separate demand for sunflower and groundnut oil.
Sunflower oil is considered light and easily digestible. This is the reason why it is widely used among health conscious consumers in urban areas.
Groundnut oil is especially used in Gujarat and South India. It is also used in making things like pakodas and deep-frying.
Why is the decision important during the festive season?
The impact of reduction in edible oil prices may be especially significant during the festive season. During festivals, the demand for oil increases among households as well as businessmen making sweets, snacks and other food items.
Lower custom duties may bring down import costs, but other factors like international prices, supply and companies' existing stocks will also determine the retail price. Therefore, the expectation of oil becoming cheaper due to duty reduction has definitely increased, but it may take time for its full benefit to reach the market.
