Food Ministry asks edible oil firms to pass on full benefit of import duty cuts

The Food Ministry has asked edible oil companies to immediately reduce distributor prices and maximum retail prices (MRP) to pass on the full benefit of the government's recent import duty cuts to consumers.

In an advisory issued on Thursday, the ministry directed edible oil associations and industry stakeholders to revise their price to distributors (PTD) and MRPs in line with the reduction in landed costs.

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The move follows the government's decision on Wednesday to cut import duties on crude and refined edible oils, aimed at moderating domestic cooking oil prices and easing inflationary pressures stemming from a sharp rise in international edible oil prices.

The basic customs duty (BCD) on crude sunflower oil was reduced from 10% to nil, while the duty on refined sunflower oil was lowered from 32.5% to 22.5%.

For crude soybean oil and palm oil, the BCD was cut from 10% to 5%. The duty on refined soybean oil and palm oil was reduced from 32.5% to 27.5%.

The ministry said it had "issued an advisory to edible oil associations and industry stakeholders to ensure that the full benefit arising from the reduction in import duty is passed on to consumers".

It also directed edible oil associations to advise their members to implement the corresponding price reductions without delay.

"The government will continue to monitor developments in international edible oil markets and domestic prices and will take appropriate measures, as necessary, to safeguard the interests of consumers while maintaining a balanced policy environment for farmers and the domestic edible oil industry," the statement said.

Duty cuts aimed at easing prices

Explaining the rationale behind the reduction, the ministry said the measure was intended to provide relief to consumers and contain inflationary pressures caused by higher global edible oil prices.

"The duty rationalisation takes into account the increase in international edible oil prices and the consequent rise in domestic landed costs and retail prices. Import duties constitute an important component of the landed cost of imported edible oils and, therefore, have a bearing on domestic market prices," it said.

The ministry said it had retained the duty differential between crude and refined edible oils to encourage the use of domestic refining capacity and discourage excessive imports of refined oils.

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The move comes as India's edible oil import bill is expected to rise, driven by higher import volumes and a weaker rupee.

According to industry body the Solvent Extractors' Association of India (SEA), the country's edible oil import bill is estimated to increase 9% to Rs 1.75 lakh crore in the current marketing year ending October.

Imports rise

India's vegetable oil imports have already increased during the ongoing oil year.

Between November and August of the 2025-26 oil year, total vegetable oil imports rose 4% to 138.8 lakh tonnes from 133.37 lakh tonnes in the corresponding period a year earlier, according to industry data.

Vegetable oil imports include both edible and non-edible oils.

India sources palm oil primarily from Malaysia and Indonesia, while soybean oil is imported from Argentina and Brazil.

The government has said it will continue to monitor international edible oil markets and domestic prices, balancing consumer interests with the needs of farmers and the domestic edible oil industry.