On 30 May 2025, the Indian government cut the basic customs duty on crude palm oil, crude soybean oil and crude sunflower oil from 20% to 10%, with immediate effect. Including surcharges, the effective duty on these oils falls from 27.5% to 16.5%. The duty on refined oils remains unchanged at 32.5% (35.75% effective).
Why it matters
India is the largest importer of edible oils in the world, buying around 15–16 million tonnes a year, more than half of its consumption. Any change in its duty structure moves global vegetable oil markets, especially palm oil from Southeast Asia and soybean oil from South America.
The decision has two clear goals. The first is to lower retail cooking oil prices for consumers. The second is to support domestic refiners: by widening the gap between crude and refined oil duties to more than 19 percentage points, the government is encouraging imports of crude oils that are refined locally, rather than finished products.
Market impact
- Stronger import demand. Lower landed costs should lift Indian purchases in the second half of the year, ahead of the festival season, when consumption traditionally peaks.
- Palm oil support. Palm oil is usually the cheapest oil delivered to India, and the duty cut improves its competitiveness at a time when production is recovering seasonally.
- Refined product flows. Exporters of refined palm olein face a tougher market in India, while crude oil shipments gain.
Our view
The decision confirms that Asian demand remains the main engine of the global edible oils trade. Combined with rising biodiesel use in producing countries, it supports a firm price floor for vegetable oils in 2025. DBI Resources supplies crude and refined edible oils to buyers across Asia and the Middle East and can help clients adapt their product mix to the new duty structure.
Sources: Government of India customs notification, 30 May 2025; Solvent Extractors' Association of India.
