New Delhi, May 30 (PTI) The government has cut the basic custom duty on crude palm oil, crude soyabean oil and crude sunflower oil by 10 per cent to bring down the prices of cooking oils and protect domestic processing industries.

India imports more than 50 per cent of its domestic edible oil requirement.

When contacted, Food Secretary Sanjeev Chopra said the government has slashed basic custom duties on crude edible oils to 10 per cent from 20 per cent.

Solvent Extractors Association of India (SEA) executive director B V Mehta said the basic custom duty on crude palm oil, crude soyabean oil and crude sunflower oil has been reduced to 10 per cent from the earlier 20 per cent.

A notification in this regard was issued on Friday and has come into force with immediate effect.

The effective import duty (basic custom duty plus other charges) on these three products will now be 16.5 per cent as against the earlier 27.5 per cent. The effective duty on refined oils is 35.75 per cent.

Both the SEA and the Indian Vegetable Oil Producers' Association (IVPA) have welcomed the decision.

They have been demanding increasing the duty difference between the crude and refined edible oils to protect the domestic processors.

Hailing the decision, Mehta said this will help the domestic industry utilise its refining capacity.

The move will also help reduce the retail prices of cooking oils, he added.

Mehta said there was higher import of refined palm oil because it is cheaper than the crude palm oil.

India imports palm oil from Malaysia and Indonesia.

IVPA president Sudhakar Desai welcomed the decision of the government to reduce the basic import duty on crude edible oil from 20 per cent to 10 per cent.

"We thank the government for accepting the IVPA recommendation to increase the duty differential between crude and refined edible oils to 19.25 per cent," he said.

It is a significantly bold move towards ensuring Make in India and also protecting the sector from the influx of refined oils, causing capacity injury to the vegetable oil sector, Desai said.

Mehta complimented the government for the bold decision.

"This is a win-win situation for vegetable oil refiners and consumers as the local price will go down due to the lower duty on crude oils," he said.

On September 14, 2024, the basic custom duty on crude soyabean oil, crude palm oil and crude sunflower oil was raised from 0 per cent to 20 per cent, making the effective duty on crude oils 27.5 per cent.

The basic custom duty on refined palm oil, refined sunflower oil and refined soyabean oil was increased in September last year from 12.5 per cent to 32.5 per cent, making the effective duty on refined oils 35.75 per cent.

The basic custom duty on refined oils remains unchanged. PTI MJH RC

Customs duty reduction on crude edible oils lowers import burden and widens duty gap to protect domestic refiners. The government reduced the basic customs duty on crude palm, soybean and sunflower oils to a lower uniform rate to lower retail prices and support domestic processors; the effective import duty on these crude oils falls materially while duties on refined oils remain unchanged, increasing the duty differential to incentivise local refining capacity and curb cheaper refined imports. The change is immediately effective by notification.