SOPA Urges Govt to Reconsider Edible Oil Import Duty Reduction

18 June 2025, New Delhi: The Soybean Processors Association of India (SOPA), representing the interests of oilseed processors and millions of soybean and oilseed farmers across the country, has raised serious concerns over the Government of India’s recent decision to reduce customs duty on crude edible oils by 11%, effective May 30, 2025.

In a letter addressed to the Union Minister of Commerce & Industry and Consumer Affairs, SOPA Chairman Dr. Davish Jain highlighted the potentially devastating impact of this policy on India’s domestic oilseed sector, urging immediate corrective measures to safeguard farmers’ livelihoods and the nation’s goal of self-reliance in edible oils.

The duty reduction, announced shortly after the government decided to hike the Minimum Support Price (MSP) for oilseeds, comes at a time when India’s inflation rate is at a historic low of 3.16% (April 2025). This move risks flooding the market with cheaper imported oils, driving down domestic edible oil prices and nullifying the benefits of the MSP hike, said SOPA chairman, adding that this could discourage oilseed cultivation, reduce acreage in the ongoing Kharif season, and push farmers toward alternative crops like paddy and maize, threatening India’s edible oil security.

The letter said that the influx of low-cost imported oils will depress domestic prices, reducing returns for oilseed farmers and making cultivation unviable. This could lead to a shift in acreage to other crops, exacerbating rural economic distress.

Small and mid-sized oilseed processing units, already grappling with negative margins due to weak demand for oil meals and high input costs, will face further losses as they compete with cheaper imports. Many units risk operating below capacity may face closure.

The SOPA chairman feared that the duty cut would impact India’s ambition of achieving self-sufficiency in edible oils and will increase dependence on imports and discourage investments in domestic production and processing infrastructure.

The duty cut will worsen the competitiveness of Indian soybean meal in global markets, with exports declining due to high domestic prices and mandatory mixing of Distillers Dried Grains with Solubles (DDGS).

To mitigate these risks and support India’s oilseed ecosystem, SOPA has proposed a comprehensive set of measures, including
restoring or dynamically adjusting import duties based on global price benchmarks to protect farmers from market shocks and maintaining a 15–20% duty differential between crude and refined oils to encourage domestic refining.

It has also urged the government to suspend duty-free imports under agreements like SAFTA and impose a minimum import price (MIP) to prevent market distortion, ensure robust MSP procurement, revive the Bhawanter (price compensation) scheme, and provide high-yielding seeds and modern farming technologies to boost productivity.

The SOPA has also urged the government to reinstate export incentives like the Merchandise Export Incentive Scheme (MEIS), increase the RoDTEP rate to 9%, and offer transport and freight subsidies for soybean meal exports to enhance global competitiveness.

The SOPA chairman in his letter has also urged the government to accelerate the National Edible Oil Mission and National Food Security Mission–Oilseeds by distributing quality seeds, providing farmer training, and ensuring guaranteed procurement. offer subsidies on power and fuel for crushing plants and low-interest loans for modernizing processing units.

Dr. Jain, stated, “While he respects the government’s broader economic objectives, the current import duty reduction risks derailing India’s progress toward self-reliance in edible oils. This policy threatens the livelihoods of millions of farmers and the sustainability of the domestic oilseed industry. We urge the government to act swiftly to protect our farmers and processors through targeted interventions and robust support measures, he added.

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