This adjustment aims to address the escalating edible oil prices resulting from the September 2024 duty hike and concurrent increases in international market prices. : Government
CHENNAI: The government has reduced the Basic Customs Duty (BCD) on crude edible oils from 20 per cent to 10 per cent. This will be beneficial for both consumers as well as the industry, which is heavily dependent on imports.
The BCD of crude sunflower, soybean, and palm oils has been reduced from 20% to 10% resulting in the import duty differential between crude and refined edible oils from 8.75% to 19.25%. A 19.25% duty differential between crude and refined oils encourages domestic refining capacity utilization and reduce imports of refined oils.
According to the government, this adjustment aims to address the escalating edible oil prices resulting from the September 2024 duty hike and concurrent increases in international market prices.
As per the new BCD, the total import duty of crude palm oil has come down to 16.5 per cent while that of refined palm oil is 35.75 per cent.
"After the government increased the duty earlier, the margins had come down and refiners had become just packers. Though the move was intended to help the farmers, the production rose much slower than the demand, this increasing imports. After our representation, government has understood that higher BCD further increased the prices when the international rates went up. The new decision is a win-win for both consumers and the refining industry," said BV Mehta, executive director of Solvent Extractors' Association.
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.
."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 government said in a release.
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, it said.
