The government has attempted to provide some relief to the public during the festive season. Recently, the government reduced the basic import duty on edible oils. This is a significant relief for the public during this festive season.

Government reduces customs duty on edible oil.

Ahead of the festive season , the government has made a major decision regarding edible oil. The government has reduced the import duty, or the tax levied on imported oil, on some edible oils. The new rates will be effective from September 24, 2026.

Due to this decision of the government, there is hope of getting some relief in the prices of edible oil in the coming days.

How much has the tax on edible oil been reduced?

The government has reduced import duties on various edible oils. See the list here:

• Crude soybean oil: reduced from 10% to 5%
• Crude palm oil: reduced from 10% to 5%
• Refined soybean oil: reduced from 32.5% to 27.5%
• Refined palm oil: reduced from 32.5% to 27.5%
• Crude sunflower oil: reduced from 10% to zero
• Refined sunflower oil: reduced from 32.5% to 22.5%

The new rates will be applicable from September 24, 2026.

What will be the impact on crude and refined oil?

India previously had a basic import duty of 10 percent on crude edible oil and 32.5 percent on refined oil. The reduced duty may reduce the cost of importing oil from abroad. This benefit may be reflected in the market in the future.

However, this doesn't mean that oil will become cheaper in stores starting September 24. Oil prices depend on a number of factors, including the international market, the rupee's value against the dollar, and old stocks held by companies.

Why was the decision taken before the festival?

Demand for edible oil increases during festivals. Sales of sweets, snacks, and other fried foods increase oil consumption. In response to this, the government has reduced import duties to make imported oil cheaper and maintain its availability in the market.

Why does India have to import oil from abroad?

India buys a large portion of its edible oil needs from abroad. Palm oil comes primarily from Malaysia and Indonesia. Large quantities of soybean and sunflower oil are also imported from other countries. Therefore, the impact of oil prices or low prices in the international market is also felt in India.

Will edible oil become cheaper now?

This is expected, but not certain. Lowering import duties could reduce corporate expenses and potentially lead to lower oil prices. However, if oil prices rise in the international market during this time, the benefits of the duty reduction could be diminished. Furthermore, the new rates may not immediately impact the old stocks already held by companies. Therefore, it may take some time for prices to decline in the market.

Farmers will also be affected.

The government must also address the needs of farmers while reducing oil prices. If oil is imported at a lower price, it could put pressure on domestic oil and oilseed prices. This could impact soybean and other oilseed farmers. Therefore, the government faces the challenge of balancing providing affordable oil to consumers and ensuring fair prices for farmers.

Import duty was changed earlier also.

In September 2024, the government increased import duties on edible oils to provide relief to domestic farmers. Subsequently, the duty on crude edible oil was reduced in May 2025. Now, in September 2026, the government has once again reduced import duties on certain categories.

What does it mean for the common man?

The simple fact is that the government has reduced the tax on imported edible oil ahead of the festive season. This could reduce costs for oil companies, and consumers may benefit in the long run. However, the actual price reduction will depend on the international and the domestic markets.