Pointing out that the government has altered edible oil import tariffs over 25 times in the last decade, a policy advocacy firm has proposed the introduction of a “Tariff Policy Plan” that would span 3 to 5 years, with annual reviews and a requirement for advance notice of 30 to 60 days for all duty revisions. However, official sources have indicated that controlling domestic prices with advance notice is challenging due to potential shortages or surpluses of edible oil, which is considered an essential commodity.
The report, titled “Tariff Volatility and Stakeholder Dynamics in India’s Edible Oil Sector,” was prepared by VeK, a policy advisory and research firm, in collaboration with the Centre for Economic Studies and Planning at Jawaharlal Nehru University and the industry chamber ASSOCHAM. It was released in New Delhi on Tuesday.
From a policy perspective, the government’s reliance on temporary tariff cuts to manage inflation provides only short-term relief, according to the report. “Without complementary interventions—such as public buffer stock mechanisms, enhanced supply-chain efficiency, and targeted consumer subsidies for vulnerable groups—tariff adjustments alone cannot shield consumers from price volatility,” it stated. Currently, the Food Corporation of India (FCI) and state-level procurement agencies have limited capabilities for managing edible oil stocks, leaving retail markets heavily reliant on private imports and speculative inventory management.
Diverting Sourcing
VeK’s Executive Chairman, T S Vishwanath, emphasized the need for improved communication between the government and the edible oil industry, suggesting that import duties should be structured within a range to prevent unexpected changes and allow stakeholders to plan their purchasing strategies accordingly. He also highlighted the necessity of diversifying sourcing destinations beyond Indonesia and Malaysia. Industry experts have noted that options for India and other countries reliant on palm oil imports from these Southeast Asian nations are limited, as these two countries account for over 85% of global crude palm oil production.
Regarding the government’s self-sufficiency plan, Vishwanath asserted that achieving this goal is unlikely within the next ten years, emphasizing that the long-term outcomes will depend on effective government policies.
Focus on Mustard and Groundnut
At the event, former President of the Solvent Extractors Association of India (SEA), Atul Chaturvedi, stated the government should allocate substantial funding to the National Edible Oil Mission, suggesting that a noteworthy portion of the import tax collected on edible oil could be set aside for this initiative. He recommended focusing on mustard and groundnut to enhance domestic oilseed production, while proposing that soybean should be primarily regarded as a protein source.
According to the report, changes to import duties have largely been made on an ad-hoc and reactive basis. This frequent adjustment distorts market expectations, complicates import planning, and increases transaction costs for refiners and traders. The report noted, “Duty hikes result in immediate retail price increases, while duty reductions often deliver incomplete or delayed relief for consumers,” adding that the lack of a medium-term tariff framework undermines investment confidence and policy reliability.
Published on October 14, 2025
