India Cuts Import Tax On Crude Edible Oils To 10 Pct - CIMB Securities
KUALA LUMPUR, June 3 (Bernama) -- India has cut the basic import duty on crude edible oils to 10 per cent from 20 per cent, effective May 31, and applies to crude palm oil (CPO), crude soybean oil, and crude sunflower oil.
In a note today, CIMB Securities Sdn Bhd said duty reduction is part of efforts to contain food inflation and promote domestic refining activities.
“This marks a reversal from the previous adjustment on Sept 14, 2024, when the Indian government raised the basic import duty on these edible oils to 20 per cent from zero,” it said.
CIMB Securities said that in addition to the basic customs duty, these edible oils are also subject to a five per cent Agriculture Infrastructure and Development Cess and a 10 per cent Social Welfare Surcharge.
“Following the latest revision, the effective import duty on these crude edible oils has been reduced to 16.5 per cent, down from 27.5 per cent previously,” it said.
CIMB Securities said that the Indian government maintained the import duty on refined palm oil, refined soybean oil, and refined sunflower oil at 35.75 per cent, thereby widening the duty differential between crude and refined edible oils to 19.25 percentage points from 8.25 percentage points previously.
“This significant gap is expected to encourage higher imports of crude edible oils over refined ones, boosting utilisation rates at Indian refineries and supporting the domestic refining sector,” it said.
CIMB Securities added that the lower duty is also expected to help reduce retail prices of packaged edible oils in India, which have surged by as much as 30 per cent over the past 12 months, dampening demand for cooking oils.
“The anticipated shift in demand from refined to CPO could benefit upstream palm oil producers, as stronger import demand from India may lend support to CPO prices,” it said.
CIMB Securities also pointed out that palm oil’s share of India’s edible oil imports fell to 42 per cent between November 2024 and April 2025, down from 60 per cent during the same period a year earlier, largely due to high premiums over other edible oils such as soybean and sunflower oil.
“Of the palm oil imported, 27 per cent was in the form of refined, bleached, and deodorised (RBD) palm olein and 73 per cent as CPO, with the latest policy revision likely to tilt this balance further in favour of CPO imports,” it said.
CIMB Securities added that Malaysian plantation companies with upstream exposure, including Kuala Lumpur Kepong Bhd, Sime Darby Plantation Bhd and IOI Corporation Bhd, are well-positioned to benefit from the policy shift.
-- BERNAMA