Duty cuts aim to lower import costs and support festive-season supply
The Central Government has reduced customs duties on specified edible-oil imports, a move that comes ahead of the festive season when demand for cooking oils typically rises across households as well as the sweets, snacks, food-service and HORECA segments.
The changes have been notified by the Ministry of Finance’s Department of Revenue through Notification No. 31/2026-Customs dated September 23, 2026. Issued under the Customs Act, 1962 and the Customs Tariff Act, 1975, the notification amends the earlier Notification No. 45/2025-Customs dated October 24, 2025.
The revised duty structure comes into force from September 24, 2026.
Under the notification, the duty rate against Serial Numbers 41 and 46 has been reduced from 10 per cent to 5 per cent. For Serial Numbers 42 and 47, the rate has been cut from 32.5 per cent to 27.5 per cent. The duty against Serial Number 49 has been reduced from 10 per cent to nil, while the rate for Serial Number 50 has been lowered from 32.5 per cent to 22.5 per cent.
Industry Sees Scope For Lower Landed Costs
Commenting on the decision, Sudhakar Desai, President, Indian Vegetable Oil Producers’ Association (IVPA), said the reduction in customs duties comes at an important juncture, particularly with the festive season approaching.
According to Desai, lower import duties should improve the landed cost of imported edible oils, potentially providing some relief to consumer prices.
For the edible-oil industry, the immediate priority is to ensure adequate availability across the country during the upcoming festival months, when demand is expected to increase not only from households but also from sweet makers, snack manufacturers, food-service operators and the HORECA segment.
Sunflower Oil Gains Greater Import Flexibility
The revised duty structure could also influence consumption patterns within the edible-oil market.
Desai said the reduction in duty on sunflower oil has been steeper, which could make the oil more affordable, particularly in South India, a major consuming region.
India remains dependent on imports for a substantial portion of its edible-oil requirement. This leaves the domestic market sensitive to international edible-oil prices and global supply conditions.
Greater flexibility to import sunflower and soyabean oil could also shift some demand away from palm oil. According to Desai, palm oil is expected to remain relatively expensive amid the implementation of B50 biofuel mandates and limited acreage expansion.
Zero-Duty Nepal Imports Remain A Concern
The industry has also raised concerns over competitive pressures from zero-duty imports from Nepal.
Desai said the edible-oil industry, particularly in northern and north-eastern markets, has been facing pressure from imports from Nepal because of the duty arbitrage with Indian duties. He noted that these imports would continue to remain more competitive than domestically refined oils even after the latest changes.
IVPA has been seeking an import quota for zero-duty imports from SAFTA countries as part of its efforts to address the issue.
Consumer Impact To Depend On Global Prices
While the reduction in customs duties could lower the landed cost of imported edible oils, the eventual impact on retail prices will depend on several other factors.
These include international commodity prices, freight costs, exchange-rate movements, domestic availability and inventory levels.
For consumers, therefore, the extent and speed of any price benefit from the duty reduction will depend on how these factors evolve alongside seasonal demand.
Industry Focuses On Festive Season Supply
Desai said the industry remains focused on maintaining adequate availability, efficient distribution and stable supplies during the festive season.
A combination of timely imports, healthy inventories and supportive policy measures, he said, should help the market respond to seasonal demand while keeping affordability in focus and supporting oilseed farmers.
The government and industry therefore face the challenge of balancing consumer affordability, adequate supplies and the interests of domestic oilseed producers as edible-oil demand rises during the festive period.
