Indonesian Palm Oil News (IPO News), Jakarta — India’s decision to cut import duties on major edible oils has opened a new chapter for the global vegetable oil market, including Indonesia’s palm oil industry.

Effective September 24, 2026, the Indian government reduced the Basic Customs Duty (BCD) on crude palm oil (CPO) and crude soybean oil from 10% to 5%. At the same time, the BCD on crude sunflower oil was eliminated, falling from 10% to zero.

For refined products, the duty on refined palm oil and refined soybean oil was reduced from 32.5% to 27.5%, while the duty on refined sunflower oil was cut from 32.5% to 22.5%. After including other applicable levies, the total import duty on CPO and crude soybean oil falls from 16.5% to around 11%, while crude sunflower oil falls to approximately 5.5%.

INDIA STILL DEPENDS HEAVILY ON IMPORTS

India is one of the world’s largest vegetable oil importers and meets nearly two-thirds of its vegetable oil demand through imports. The main imported oils are palm oil, soybean oil and sunflower oil, with major supplies coming from countries including Indonesia, Malaysia, Argentina, Russia and Ukraine.

The latest duty reduction is intended to lower landed costs and moderate domestic edible oil prices. The Indian government said the policy is also aimed at easing inflationary pressures and ensuring that the benefit of lower import costs is passed on to consumers.

The timing is also significant. India is entering its September-November festive season, when demand for cooking oil typically increases as households consume more sweets, snacks and fried foods.

AN OPPORTUNITY FOR INDONESIAN CPO

For Indonesia, the policy could create additional room for palm oil exports to India. Lower import duties should improve the economics of imported CPO and potentially encourage Indian refiners to increase purchases. Reuters reported that refiners had previously held back purchases while anticipating the duty reduction and could now step up imports to meet festive season demand.

This could provide a positive signal for Indonesian palm oil exporters, particularly because India remains one of the most important destinations for global palm oil. However, the opportunity should not be interpreted as an automatic increase in Indonesian CPO exports.

SUNFLOWER OIL COULD TAKE PART OF THE DEMAND

One of the most important points in India’s new policy is that the largest tariff benefit goes to crude sunflower oil. Its BCD has been reduced completely from 10% to zero, while the total import duty falls from 16.5% to around 5.5%. This makes sunflower oil significantly more competitive for Indian refiners.

According to Reuters, Aashish Acharya, Vice President at Patanjali Foods, said sunflower oil could become more attractive as a result of the duty cut and potentially take some demand away from soybean and palm oil.

This means Indonesia’s palm oil industry faces a two sided development: lower duties may support overall edible oil consumption in India, but palm oil will also have to compete more aggressively with sunflower oil.

THE KEY QUESTION: HOW MUCH WILL INDONESIA BENEFIT?

The impact on Indonesia will ultimately depend on actual purchasing decisions by Indian refiners. If lower duties stimulate overall edible oil consumption and palm oil maintains its competitiveness on price, availability and logistics, Indonesian CPO could capture additional demand. But if the larger tariff advantage encourages Indian buyers to shift part of their purchases toward sunflower oil, the increase in palm oil demand could be more limited.

Therefore, the Indonesian palm oil industry needs to monitor not only India’s total edible oil imports, but also the composition of those imports by type of oil. This is particularly important because India’s vegetable oil prices have risen by nearly 20% over the past year, while the government is seeking to reduce pressure on consumers.

WHAT SHOULD INDONESIA WATCH?

For Indonesian palm oil exporters, several indicators will be important over the coming months: India’s monthly CPO import volume, the share of palm oil versus soybean and sunflower oil, refinery buying activity, international palm oil prices and the competitiveness of Indonesian CPO against Malaysian supply.

The policy is clearly a positive development for the global edible oil market because it can stimulate demand. But for Indonesia, the real measure of the opportunity will be whether the policy translates into additional CPO purchases.

India has opened the door wider for imported edible oils. The question now is how much of that additional demand will ultimately be captured by palm oil and how much by sunflower and soybean oil.

For Indonesia, this is not simply a matter of waiting for higher exports. It is a market opportunity that will require competitive pricing, reliable supply and strong relationships with Indian buyers.

Muslim M. Amin
Editor in Chief – IPO NEWS

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