A major farmers' alliance has strongly criticized the Government of India’s recent decision to slash customs duties on the import of crude edible oils, warning that the move will severely undermine domestic oilseed producers and small-scale refiners.
The Alliance for Sustainable and Holistic Agriculture (ASHA)-Kisan Swaraj, in a sharply-worded press statement released today, demanded an immediate rollback of the duty cuts that came into effect on May 31, 2025. The revised customs structure now imposes only 10% basic duty, 5% agriculture cess, and 10% social welfare cess, leading to an effective duty of 16.5% on crude imports of palm, soybean, rapeseed, and sunflower oils.
“This decision is a setback to the very farmers that the government claims to support,” said the Alliance, pointing out that the duty reduction came within 24 hours of the Centre’s announcement of Minimum Support Price (MSP) hikes for major oilseeds. Groundnut MSP was increased by ₹480 per quintal, sunflower by ₹441, soybean by ₹436, sesamum by ₹579, and niger seed by ₹820.
“While MSP hikes were intended to incentivize domestic oilseed cultivation, slashing import duties will flood the market with cheaper foreign oils, dragging down local prices and nullifying the benefits of MSP,” ASHA stated.
The alliance further noted that India’s oilseed processing industry is already under pressure due to declining demand for oil meals from the livestock sector. The growing use of Distillers Dried Grains with Solubles (DDGS) — a byproduct of ethanol production — in animal feed has cut into demand for traditional oilseed meals. With India’s annual ethanol output exceeding 5 billion litres, this shift has dealt an additional blow to oilseed processors, particularly small and mid-sized units.
“Though lower import duties may aid large, port-based edible oil refineries in the short term, they endanger the livelihood of millions of farmers and processors. It also seriously jeopardizes India's long-term goal of edible oil self-reliance,” the Alliance warned.
ASHA also expressed concern that the policy shift might be linked to ongoing trade talks with the United States. “It appears the government has yielded to U.S. pressure to liberalize agri-imports, particularly in sectors like soybean oil where the U.S. is a dominant player,” the statement said. The group raised alarms about the potential for backdoor entry of genetically modified (GM) products into Indian food systems through unregulated imports of oils and animal feed.
ASHA accused the government of opting for short-term consumer relief without addressing the deeper challenges of price volatility, distorted supply chains, and agrarian distress. The Alliance has demanded complete transparency on India-U.S. trade negotiations and urged the government to protect the interests of domestic producers and uphold biosafety standards.
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