Crude sunflower oil BCD reduced to zero; soybean and palm oil duty cut to 5 per cent
New Delhi: The Central government has reduced the Basic Customs Duty (BCD) on major imported crude edible oils in a move aimed at moderating domestic edible oil prices and providing relief to consumers amid a sharp rise in international edible oil prices.
Under the revised duty structure, the BCD on crude sunflower oil has been reduced from 10 per cent to nil. The duty on crude soybean oil and crude palm oil has been reduced from 10 per cent to 5 per cent.
The government has also reduced the applicable BCD on corresponding refined edible oils while retaining a 19.25 per cent import duty differential between crude and refined edible oils.
Government Seeks Faster Pass-Through to Consumers
The government expects the reduction in import duties to lower the landed cost of imported edible oils and facilitate the transmission of these savings through the supply chain.
To ensure that consumers receive the benefit, the government has issued an advisory to edible oil associations and industry stakeholders.
Industry participants have been asked to immediately review and revise their Price to Distributors (PTD) and Maximum Retail Price (MRP) in line with the reduction in landed costs.
Edible oil associations have also been advised to instruct their members to implement the corresponding price reductions without delay.
19.25% Duty Differential Retained
Despite lowering duties on crude edible oils, the government has retained the 19.25 per cent differential between crude and refined edible oils.
According to the government, maintaining this differential is intended to encourage the use of India’s domestic refining capacity and discourage excessive imports of refined edible oils.
The policy is also aimed at providing a more level playing field for domestic refiners and encouraging value addition within the country.
Focus on Consumer Prices and Domestic Industry
The duty reduction comes against the backdrop of higher international edible oil prices, which can feed into domestic food costs because India relies significantly on imports to meet its edible oil requirements.
The government said it will continue to monitor international edible oil markets as well as domestic prices.
Further measures may be considered if required to protect consumer interests while maintaining a balance between the interests of consumers, farmers and the domestic edible oil industry.
The latest changes are therefore intended to provide near-term relief on imported crude edible oils while continuing to support domestic refining and value addition.
