New Delhi: India has slashed its basic import duty on crude edible oils to 10 percent from the previous 20 percent, effective May 31. This adjustment applies to crude palm oil (CPO), crude soybean oil, and crude sunflower oil.

According to BERNAMA News Agency, CIMB Securities Sdn Bhd indicated that this duty reduction is part of India’s strategy to manage food inflation and promote domestic refining activities. This change reverses a previous policy adjustment from September 14, 2024, when the import duty on these oils was increased to 20 percent from zero.

CIMB Securities highlighted that, apart from the basic customs duty, these edible oils are also subject to a five percent Agriculture Infrastructure and Development Cess and a 10 percent Social Welfare Surcharge. With the recent revision, the effective import duty on these crude edible oils has been reduced to 16.5 percent from 27.5 percent.

The Indian government has maintained the import duty on refined palm oil, refined soybean oil, and refined sunflower oil at 35.75 percent. This move widens the duty differential between crude and refined edible oils to 19.25 percentage points from 8.25 percentage points, encouraging higher imports of crude edible oils over refined ones. It is anticipated to boost utilisation rates at Indian refineries and support the domestic refining sector.

Additionally, the lower duty is expected to reduce retail prices of packaged edible oils in India, which have increased by up to 30 percent over the past year, affecting demand for cooking oils. The anticipated demand shift from refined oils to CPO could benefit upstream palm oil producers, as stronger import demand from India may support CPO prices.

CIMB Securities noted that palm oil’s share of India’s edible oil imports decreased to 42 percent between November 2024 and April 2025, down from 60 percent during the same period a year earlier, due to high premiums over other edible oils like soybean and sunflower oil. Of the palm oil imported, 27 percent was refined, bleached, and deodorised (RBD) palm olein, and 73 percent was CPO. The latest policy revision is likely to further tilt this balance in favor of CPO imports.

The agency also pointed out that Malaysian plantation companies with upstream exposure, such as Kuala Lumpur Kepong Bhd, Sime Darby Plantation Bhd, and IOI Corporation Bhd, are well-positioned to benefit from this policy shift.