Crude edible oil duty cut to bring cheer to Argentina and Russia, along with Indian consumers

India's edible oil imports have been rising, tilting more to Russia and Argentina

The reduction in customs duty on crude edible oil imports is expected to not only benefit Indian consumers and Southeast Asian nations but also extend a significant boost to suppliers in Russia and Argentina, a Moneycontrol analysis shows.

On June 11, the government halved the basic customs duty on crude edible oils to 10 percent.

India’s growing dependence on crude edible oils in the post-pandemic period has gone hand-in-hand with a diversification of its supply chains. The Moneycontrol analysis of trade data reveals that the share of crude edible oil in India’s edible oil imports rose from 83 percent before the pandemic to 88 percent after 2021. During this period, Russia has rapidly emerged as a major supplier.

The new matrix

Moscow, which accounted for just 3.4 percent of India’s crude edible oil imports in 2021–22, jumped to a 16.7 percent share in 2024–25 (November–April), according to data from the Solvent Extractors’ Association of India. While Southeast Asian nations continue to supply two-fifths of India’s edible oil needs—with Indonesia leading at 24.1 percent—Russia now ranks third.

Indonesia’s dominance is also being challenged by Argentina, which displaced Malaysia to become India’s second-largest supplier. Between November 2024 and April 2025, Argentina accounted for 23 percent of India’s crude edible oil imports, compared to Malaysia’s 14.7 percent. In 2023–24, Argentina had a 15.9 percent share while Malaysia led with 20.3 percent.

The broader shift in sourcing also reflects a change in product preference. Soybean and sunflower oil imports accounted for 58 percent of total crude edible oil imports in November 2024–April 2025, up from 40 percent during the same period the previous year. Palm oil, however, remains the largest category in India’s edible oil import basket.

Argentina has emerged as the dominant supplier of soybean oil, accounting for 60 percent of total imports in this category. Russia, similarly, commands a 62 percent share of India’s crude sunflower oil imports.

Policy shift

“The revised duty structure will discourage the import of refined Palmolein and redirect demand towards crude edible oils, especially crude palm oil, thereby strengthening and revitalising the domestic refining sector. This significant policy intervention not only ensures a level playing field for domestic refiners but also contributes to the stabilisation of edible oil prices for Indian consumers,” the government noted in a press release.

This policy shift comes at a time when inflation in edible oil prices has been a key contributor to persistent food inflation. In September last year, the government had raised the basic customs duty on crude soybean oil, crude palm oil, and crude sunflower oil to 20 percent from zero.

Edible oil forms a significant part of Indian household budgets, comprising 7.7 percent of rural and 6.1 percent of urban consumption baskets. Prices in the oils and fats category have recorded double-digit inflation for the past six months, preventing broader food inflation from easing further.