5 stocks likely to benefit after government cuts edible oil import duties

INDIA, 25 SEPTEMBER 2026 —

India’s food ministry on Thursday announced a sweeping reduction in basic customs duties on crude and refined edible oils, a move aimed at tempering a near‑20 percent rise in domestic vegetable‑oil prices over the past year and easing inflationary pressure ahead of the festive season.

The duty cuts are intended to lower the landed cost of imported oils and to pass the benefit on to consumers, the ministry said in an advisory to edible‑oil associations and industry stakeholders. The ministry directed the associations to ensure that distributors and retailers adjust their prices immediately to reflect the reduced import duties.

The basic customs duty (BCD) on crude sunflower oil was cut from 10 percent to zero, while the duty on refined sunflower oil fell from 32.5 percent to 22.5 percent. For crude soybean oil and crude palm oil the BCD was reduced from 10 percent to 5 percent, and the duty on refined soybean oil and refined palm oil was lowered from 32.5 percent to 27.5 percent.

The Agriculture Infrastructure and Development Cess and Social Welfare Surcharge will remain in place, meaning the total import duty on crude palm oil and crude soybean oil will be 11 percent and on crude sunflower oil 5.5 percent, down from a previous total of 16.5 percent.

The ministry said the duty rationalisation takes into account the surge in international edible‑oil prices, which has lifted domestic landed costs and retail prices. Import duties form a significant component of the landed cost of imported oils, and the reduction is expected to translate into lower retail prices for cooking oil.

The ministry also retained the duty differential between crude and refined oils to encourage the use of domestic refining capacity and to discourage excessive imports of refined oils.

India imports roughly 60 percent of its edible‑oil needs, sourcing palm oil mainly from Malaysia and Indonesia and soybean oil from Argentina and Brazil. In the current marketing year ending October, the industry body SEA estimates the edible‑oil import bill will rise 9 percent to about Rs 1.75 lakh crore, driven by higher volumes and higher global prices.

The government said it will continue to monitor international markets and domestic prices and will take further measures as necessary to protect consumers while maintaining a balanced policy environment for farmers and the domestic edible‑oil industry.

The duty cuts are expected to benefit domestic edible‑oil companies. Aashish Acharya, vice‑president of Patanjali Foods, told Reuters that sunflower oil will be the biggest beneficiary of the duty cut, making it more attractive for refiners and potentially shifting demand away from soybean and palm oil.

Sandeep Bajoria, chief executive of Sunvin Group, a vegetable‑oil brokerage, said refiners had held back purchases in anticipation of the duty reduction and will now step up imports to meet festival‑season demand.

The Food Ministry’s advisory also instructed edible‑oil associations to advise their members to implement the corresponding price reductions without delay. Sudhakar Desai, president of the Indian Vegetable Oil Producers Association (IVPA), said the lower import duty could reduce the landed cost of imported oil, likely providing some relief to consumers, and that the significant reduction on sunflower oil could affect prices especially in South India.

The timing of the announcement coincides with a period of heightened demand for cooking oil ahead of the Navratri and Diwali festivals, which fall in the next two months. Retail prices of cooking oil are expected to fall, although the extent of the impact will depend on international prices, the rupee’s exchange rate, freight costs and domestic supply, according to India TV News.

The IVPA cautioned that while the duty cut should lower oil prices, other factors such as commodity prices, freight charges, the rupee’s value, domestic availability and company stocks will also shape the final retail price.

The move follows a broader government push to contain food‑price inflation. Earlier in the week, the ministry announced the duty cuts as part of a strategy to moderate domestic cooking‑oil prices and ease inflationary pressures stemming from a sharp rise in global edible‑oil prices. The ministry said it would continue to monitor developments in international edible‑oil markets and domestic prices and take appropriate measures as necessary.

Analysts note that the duty cuts could have implications for Malaysia, a major supplier of palm oil to India. With India’s import bill projected to rise despite the duty reduction, Malaysian exporters may see sustained demand, even as the lower duties could make imported palm oil marginally cheaper for Indian refiners.

The retained duty differential that favours crude over refined oils may also encourage Indian refiners to process more crude palm oil domestically, potentially affecting the volume of refined palm oil imported from Malaysia.

The government’s decision marks a decisive policy shift aimed at curbing the inflationary impact of soaring global edible‑oil prices while supporting domestic refiners and consumers. The ministry’s next steps will involve close monitoring of price movements and further adjustments if required to safeguard consumer interests and maintain a balanced environment for the domestic edible‑oil sector.

Related: India