The Import Duty Seesaw

How India frequently raises and cuts import duties on edible oils to balance consumer prices and farmer incomes, and why this uncertainty is costly.

India changes import duties on edible oils often.

The balancing act

Low duties: cheaper oil for consumers, but lower prices for domestic oilseed farmers.
High duties: better farmer prices, but costlier cooking oil.

Examples

In 2021-22, as global prices spiked, India cut duties on crude palm, soybean and sunflower oils to near zero to ease inflation.
In September 2024, India raised duties to support farmers as prices fell.
In 2025, India cut duties on crude edible oils again to encourage domestic refining and control prices.

Uncertainty costs

Farmers can’t predict future prices when deciding whether to plant oilseeds.
Refiners and traders face sudden changes.

Crude vs refined

India often keeps a wider gap between duties on crude and refined oils to encourage domestic refining, supporting jobs in processing.

Global effects

As the biggest importer, India’s duty changes move world prices of palm and soybean oil.

The farmer's guess

A soybean farmer in Madhya Pradesh plants soybean when duties are high. By harvest, duties are cut and imports push prices down, so his earnings fall.

Thinking import duties are set once and left alone

India adjusts edible oil duties frequently.

Key takeaways

India adjusts edible oil duties to balance consumers and farmers.
Duties were cut in 2021-22 and raised in 2024.
Frequent changes create uncertainty for farmers.
Duty gaps encourage domestic refining.