Skip to content
GK24

Crude Sunflower Oil Import Duty Cut to Nil, Palm and Soybean to 5%

Basic Customs Duty on crude sunflower oil is now nil and that on crude palm and soybean oil 5%, with the crude-refined duty gap held at 19.25% for refiners.

By Published · 2 min read
Crude Sunflower Oil Import Duty Cut to Nil, Palm and Soybean to 5% — GK24 title card

Why in News

On 24 September 2026 the Centre cut the Basic Customs Duty on crude sunflower oil to nil and on crude soybean and crude palm oil to 5%, while keeping a 19.25% duty differential between crude and refined edible oils.

The Ministry of Consumer Affairs, Food and Public Distribution said on 24 September 2026 that the Basic Customs Duty (BCD) on the main crude edible oils brought into India has been lowered. World prices of cooking oil have climbed steeply, that climb had begun to show up in Indian shops, and the duty is the quickest lever the Centre holds over the landed cost of an imported oil.

The new rates

OilEarlier BCDNew BCD
Crude sunflower oil10%Nil
Crude soybean oil10%5%
Crude palm oil10%5%

The levy on the refined versions of the same oils has been trimmed alongside, but not by an equal amount. The Centre has deliberately held the distance between the crude rate and the refined rate at 19.25%.

Why the gap is kept

A duty wall between crude and refined oil settles the question of where the refining happens. If refined oil could enter almost as cheaply as crude, mills inside the country would sit idle and the value addition would move abroad. Keeping crude cheaper to bring in protects the use of Indian refining capacity, discourages a flood of refined imports and leaves the processing margin at home, which is the level playing field the announcement speaks of.

Making sure the cut reaches the buyer

A tariff cut helps a household only if the trade passes it down, so an advisory has gone to the edible oil associations and to other industry stakeholders. They have been asked to rework the Price to Distributors (PTD) and the Maximum Retail Price (MRP) at once, in step with the fall in landed cost, and the associations have been asked to tell their members to act without waiting. The government has added that it will keep watching world markets and shop prices and will step in again if it has to, weighing the interest of the consumer against that of the oilseed farmer and the refining industry.

For the exam

  • BCD is a customs levy, so a change in it is a tariff decision rather than a tax on domestic sale.
  • Nil duty applies to crude sunflower oil alone; crude palm oil and crude soybean oil pay 5%.
  • The number to memorise is the 19.25% differential and the reason the government gives for holding it.

Important Facts

DecisionBasic Customs Duty cut on major crude edible oils
Crude sunflower oil10% reduced to nil
Crude soybean and crude palm oil10% reduced to 5%
Crude-refined duty differential19.25%, kept unchanged
MinistryConsumer Affairs, Food and Public Distribution
Advisory to industryRevise Price to Distributors (PTD) and Maximum Retail Price (MRP) immediately
Reason givenSharp rise in international edible oil prices and inflationary pressure at home
Announced on24 September 2026

Exam Point of View

Remember which oil got the nil rate (crude sunflower), which two went to 5% (crude soybean and crude palm), the earlier rate of 10%, the 19.25% crude-refined differential and why it is kept, the ministry involved and the two prices industry was told to revise, the PTD and the MRP.

Practice Questions

Q3.EconomyMedium

Which ministry announced the reduction in import duty on major edible oils?

  1. A.Ministry of Finance
  2. B.Ministry of Commerce and Industry
  3. C.Ministry of Agriculture and Farmers Welfare
  4. D.Ministry of Consumer Affairs, Food and Public Distribution
Show answer
Correct answer: D. Ministry of Consumer Affairs, Food and Public Distribution

The reason it and not another ministry speaks here is that the stated purpose of the step is to moderate retail prices of cooking oil and to shield the household budget from imported inflation, which falls squarely within the consumer affairs and food distribution mandate.

Q4.EconomyEasy

Which two prices were edible oil companies asked to revise immediately after the duty cut?

  1. A.Minimum Support Price and Fair and Remunerative Price
  2. B.Price to Distributors and Maximum Retail Price
  3. C.Wholesale Price Index and Consumer Price Index
  4. D.Issue Price and Central Issue Price
Show answer
Correct answer: B. Price to Distributors and Maximum Retail Price

The advisory issued to the edible oil associations and other industry stakeholders asks them to bring both of these down in step with the lower landed cost, and to advise member firms to act without delay, so that the gain from the tariff cut is not retained in the supply…

Frequently Asked Questions

Which edible oil now attracts nil Basic Customs Duty?

Crude sunflower oil. Its Basic Customs Duty has been brought down from 10% to nil, while crude soybean oil and crude palm oil now pay 5% instead of 10%.

What is the duty differential between crude and refined edible oils?

It stands at 19.25% and has been kept unchanged, so that refining continues inside the country and imports of already refined oil are not encouraged.

What has the government asked the edible oil industry to do?

To revise the Price to Distributors and the Maximum Retail Price immediately in line with the lower landed cost, so the full benefit of the duty cut reaches consumers.

Sources

Useful for:SSCSSC CGLIBPS