Edible Oil: After the release of GDP data, the government has given very good news to the common people of the country. Now the prices of edible oil in the country can come down. The government said in a notification that to reduce food prices, the Center on Friday reduced the basic customs duty on crude edible oils by 10 percent.
This change will be effective from May 31. Since India meets more than 70 percent of its vegetable oil demand through imports, this step will directly affect your kitchen budget. Know how much reduction has been made on which oils and what will be its effect.
Why edible oil prices fell
India meets more than 70 percent of its vegetable oil demand through imports. India mainly buys palm oil from Indonesia, Malaysia, and Thailand, while it imports soy oil and sunflower oil from Argentina, Brazil, Russia, and Ukraine.
This move will reduce the prices of edible oil and increase demand, which will result in increased foreign purchases of palm oil, soy oil, and sunflower oil. This will benefit consumers by affecting the balance of supply and demand.
How much tax was reduced on which oil
The government has reduced the basic customs duty on crude palm oil, crude soy oil, and crude sunflower oil from the earlier 20 percent to 10 percent. This will reduce the total import duty on the three oils from the earlier 27.5 percent to 16.5%, which is also subject to India’s agricultural cess.
In September 2024, India imposed a basic customs duty of 20 percent on crude and refined vegetable oils. After the amendment, crude palm oil, crude soy oil, and crude sunflower oil attracted an import duty of 27.5 percent as compared to the earlier 5.5 percent, while refined grades of the three oils now attract an import tax of 35.75 percent. This is a significant policy change that will impact the market.