New Delhi, 29 May 2025: As major palm oil exporting countries incentivise the exports of refined palm oil, there has been an unprecedented surge in refined palm oil imports to India in the past five month posing a serious risk to not just the refining industry with underutilisation and job losses but also farmers and consumers with lower farmgate price of oilseeds.
Accordingly, IVPA has urged the government to raise the net effective duty differential between crude and refined edible oils to 20% from the current 8.25%. The existing differential is being effectively nullified due to higher export levies and taxes imposed by exporting countries on crude palm oil, while refined palm oil and its derivatives are subsided by way of lower export duties than crude oils.
This has led to an influx of refined palm oils there by leading to underutilization of India’s refining capacity in the refining and allied sectors.
According to import data, India imported 8.24 lakh MT of RBD Palmolein between October 2024-February 2025, up 80% from 4.58 lakh MT of RBD Palmolein imported between June-September 2024.
Imports of refined palm oil surged from 4.58 lakh MT (accounting for 14% of total palm oil imports) during June–September 2024 to 8.24 lakh MT (representing about 30 % of total palm oil imports) in the period October 2024–February 2025. The imports of refined products at about Rs1- Rs 2 per litre helped only the traders and the distribution channel but the benefit to the consumers is almost negligible. However it has huge destabilising effect on the Industry negatively affecting the Capacity Utilisation in the country.
“By levying high export duties and taxes on crude palm oil (CPO) and imposing lower or zero duties on refined palm olein (RPO), palm oil exporting countries are incentivize the export of finished goods and discourage value addition in India.”
| MONTH | RBD Palmolein (‘000 MT) | Crude Palm Oil (‘000 MT) | Refined % | % share Refined | % share Crude |
| Jun-24 | 1,45,237 | 6,37,897 | 19 | 14% | 86% |
| Jul-24 | 1,36,853 | 9,36,876 | 13 | ||
| Aug-24 | 92,138 | 7,00,711 | 12 | ||
| Sept- 2024 | 84,279 | 4,32,510 | 16 | ||
| Jun-Sept 2024 | 4,58,507 | 27,07,994 | |||
| Oct-24 | 2,36,175 | 5,96,929 | 28 | 29% | 71% |
| Nov-24 | 2,84,537 | 5,47,309 | 34 | ||
| Dec-24 | 1,65,290 | 3,26,587 | 34 | ||
| Jan-25 | 30,465 | 2,40,276 | 11 | ||
| Feb-25 | 1,07,949 | 2,65,600 | 29 | ||
| Oct 2024-Feb2025 | 8,24,416 | 19,76,701 |
“Higher domestic refining will result in greater availability of by-products like PFAD and Palm Stearin, increased raw material supply for ancillary sectors such as bakery, oleochemicals, soap industry etc.
Currently, refined edible oils are exempt from the Agriculture Infrastructure and Development Cess (AIDC), while a 5% AIDC is applied to crude oils, effectively narrowing the duty differential to from 12.5% to just 8.25%. To address this imbalance, IVPA has recommended levying a 10–15% AIDC on refined oils to ensure a level playing field and encourage domestic refining and processing of crude palm oil.
The association has also requested the government to place refined edible oils under the “Restricted List” as done in the past when such a surge in finished product was witnessed. Such a move would help regulate the import volumes of refined products.
Such policy corrections will result in a healthy refining sector which supports consistent oilseed demand and fair farmgate prices, secures thousands of direct and indirect jobs in this 3 lakh crore Industry.
