India’s edible oil sector seeks tariff stability: Study urges multi-year framework; warns frequent duty shifts hurt investment and prices
India, the world’s largest importer of cooking oil, needs a predictable and transparent multi-year tariff framework for edible oils to end a decade of policy volatility that has distorted prices and discouraged investment, a new study has found.The research titled “Tariff Volatility and Stakeholder Dynamics in India’s Edible Oil Sector” — jointly conducted by the Centre for Economic Studies and Planning at Jawaharlal Nehru University, VeK Policy Advisory and Research, and Assocham — said the country has altered tariffs over 25 times since 2015, causing uncertainty across the supply chain from global suppliers to domestic consumers, PTI reported.With palm oil accounting for about 60% of India’s edible oil imports, the study recommended setting predictable tariff bands, strengthening market data systems, and institutionalising stakeholder consultations before policy changes.“Tariff policy in India’s edible oil sector must evolve from a reactive instrument to a strategic policy tool,” VeK Founder and Executive Chairman T.S. Vishwanath told PTI after launching the report.The study, commissioned to assess the tariff impact amid India’s self-reliance drive under the National Mission on Edible Oils–Oil Palm (NMEO-OP), said frequent ad hoc revisions have complicated import planning and increased transaction costs for refiners and traders.According to the findings, duty hikes lead to immediate jumps in retail prices, while cuts fail to deliver proportional consumer relief due to asymmetric price transmission. Refiners face margin uncertainty from inconsistent crude–refined duty differentials, while FMCG companies struggle with input cost volatility that undermines pricing stability.International suppliers also face unpredictable import demand, making it difficult to plan supply commitments. Palm oil’s dominance makes it the price anchor for all edible oils in India but also exposes the country to external policy risks from key producers such as Indonesia and Malaysia — including export bans, biofuel diversion, and geopolitical disruptions.The study warned that without diversifying its edible oil sources, India remains vulnerable to global shocks, currency swings, and supply chain disruptions. It proposed developing an integrated edible oil data portal to track global prices, import volumes, and retail trends, alongside AI-based forecasting tools for policy simulation and early warnings.The research also called for formal consultation mechanisms with industry bodies, farmer groups, and FMCG associations before tariff revisions. It suggested promoting hedging and futures trading, providing technical assistance to small refiners, and issuing monthly policy briefs to improve transparency and communication.If implemented, the report said, these measures could enhance refining capacity utilisation, ensure timely price pass-through to consumers, reduce import dependency, and align India’s edible oil policy with its economic and food security goals.“Focusing on palm oil tariff stability offers the most effective lever to ensure market equilibrium, reduce import dependency, and strengthen investor confidence,” the study concluded
