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  3. Government reduces BCD on crude edible oils from 20% to 10%

Government reduces BCD on crude edible oils from 20% to 10%

12 Jun 2025 Evaluate

In order to curb rising edible oil prices, the government has reduced the Basic Customs Duty (BCD) on key crude edible oils -sunflower, soybean, and palm oils from 20 per cent to 10 per cent. The reduced BCD would result in the import duty differential between crude and refined edible oils increasing from 8.75 per cent to 19.25 per cent. 

This adjustment aims to address the escalating edible oil prices resulting from the September 2024 duty hike and concurrent increases in international market prices. An advisory has been issued to edible oil associations and industry stakeholders to ensure that the full benefit of the reduced duty is passed on to consumers. 19.25% duty differential between crude and refined oils helps to encourage domestic refining capacity utilization and reduce imports of refined oils. Import duty on edible oils is one of the important factors that impacted landed cost of edible oils and thereby domestic prices. By lowering the import duty on crude oils, the government aims to reduce the landed cost and retail prices of edible oils, providing relief to consumers and helping to cool overall inflation. The reduced duty will also encourage domestic refining and maintain fair compensation for farmers.

The revised duty structure will discourage the import of refined Palmolein and redirect demand towards Crude Edible Oils Especially Crude Palm Oil, thereby strengthening and revitalizing the domestic refining sector. This significant policy intervention not only ensures a level playing field for domestic refiners but also contributes to the stabilization of edible oil prices for Indian consumers. This decision comes after a detailed review of the sharp rise in edible oil prices following last year’s duty hike. The increase led to significant inflationary pressure on consumers, with retail edible oil prices soaring and contributing to rising food inflation.

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