The Union government on Thursday (September 24, 2026) reduced the Basic Customs Duty (BCD) on major imported crude edible oils, including palm oil. A statement from the Union Food and Consumer Affairs Ministry said the decision was taken to moderate domestic edible oil prices, provide relief to consumers, and mitigate “inflationary pressures” arising from the “sharp increase in international edible oil prices”.

The BCD on crude sunflower oil has been reduced from 10% to nil, while the BCD on crude soybean oil and crude palm oil has been reduced from 10% to 5%.

“The Government has simultaneously reduced the applicable BCD on the respective refined edible oils while maintaining an import duty differential of 19.25% between crude and refined edible oils. The duty rationalisation takes into account the increase in international edible oil prices and the consequent rise in domestic landed costs and retail prices,” the Centre said in the release, adding that import duties constitute an important component of the landed cost of imported edible oils, and therefore have a bearing on domestic market prices.

The Centre expects that the reduction in BCD on crude edible oils will lower their landed cost and facilitate transmission of the benefit through the domestic supply chain. “The measure is intended to provide relief to consumers while contributing to the broader objective of containing food-price and overall inflationary pressures,” it said.

The government said it has maintained the duty differential between crude and refined edible oils to support the utilisation of domestic refining capacity and discourage excessive imports of refined edible oils. “The measure is expected to provide a more level playing field for domestic refiners while supporting continued value addition within the country,” it said. 

Reacting to the development, the Indian Vegetable Oil Producers’ Association (IVPA), the national body of edible oil industry, said it comes at an important juncture, particularly with the festive season approaching. IVPA president Sudhakar Desai said lower import duties should improve the landed costs of imported edible oils which can provide some reduction in consumer prices. “For the edible-oil sector, the immediate priority is to ensure adequate availability across the country during the upcoming festival months, with higher household demand as well as increased requirements from the sweets, snacks, food-service and hotel, restaurants and cafes/catering segments,” he said.

The government said it has also 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.