India cuts oil import duty: Which cooking oils could get cheaper?

Cooking oil prices could ease during the festive season after the government reduced import duties on crude and refined edible oils, including palm, soy and sunflower oil.

The move comes as vegetable oil prices in India have risen nearly 20 per cent over the past year. The duty cuts are aimed at improving domestic availability and supporting consumption during the September-November festive period, when demand for sweets, snacks and fried foods typically rises.

Import duty cut across key oils

According to a government notification issued late on Wednesday, the basic import duty on crude palm oil and crude soy oil has been reduced to five per cent from 10 per cent.

For refined palm oil and refined soy oil, the duty has been lowered to 27.5 per cent from 32.5 per cent. The biggest reduction has been announced for sunflower oil. The basic duty on crude sunflower oil has been brought down to zero from 10 per cent, while the duty on refined sunflower oil has been reduced to 22.5 per cent from 32.5 per cent.

Other levies, including the Agriculture Infrastructure and Development Cess and Social Welfare Surcharge, will continue to apply.

As a result, the total import duty on crude palm oil and crude soy oil will fall to 11 per cent from 16.5 per cent. For crude sunflower oil, the total duty will decline to 5.5 per cent from 16.5 per cent.

Refiners expected to increase imports

The duty reduction could encourage refiners to step up purchases ahead of the festive season. India imports nearly two-thirds of its vegetable oil requirement, with palm, soy and sunflower oil making up a major share of those imports.

"Anticipating a reduction in import duty, refiners had held back on purchases, but they will now step up imports to meet festival-season demand," Mumbai-based Sandeep Bajoria, chief executive of Sunvin Group, a vegetable oil brokerage, told NDTV.

India sources edible oils from countries including Malaysia, Indonesia, Argentina, Russia and Ukraine.

Sunflower oil could benefit most

The reduction in duties is expected to make sunflower oil more competitive for refiners. Aashish Acharya, vice president at Patanjali Foods Ltd, said sunflower oil could be the biggest beneficiary of the move and may draw some demand away from soy and palm oil.

The higher availability of imported edible oils could also influence international palm and soy oil prices as Indian refiners increase purchases.