India’s sunflower oil imports are expected to jump 30% to around 3.5 million tonnes in the 2026/27 marketing year after the government eliminated the basic import duty on crude sunflower oil. The forecast, cited by the Solvent Extractors’ Association of India (SEA), highlights how a change in import taxation could significantly reshape India’s edible-oil purchasing mix in the coming year
The government reduced the basic customs duty on crude sunflower oil from 10% to zero on September 24 as part of a broader effort to lower edible-oil prices and ease inflationary pressure. At the same time, the basic duty on crude soybean and palm oil was reduced from 10% to 5%. The changes are intended to lower landed costs and allow the benefit to flow through the domestic supply chain to consumers.
Sunflower Oil Imports Could Reach 3.5 Million Tonnes
Angshu Mallick, president of the Solvent Extractors’ Association of India, expects sunflower oil imports to increase by approximately 30% in the marketing year beginning November 1.
That would take imports to around 3.5 million tonnes, up substantially from the previous year.
The main reason is straightforward: removing the 10% basic import duty makes crude sunflower oil more competitive against other imported edible oils.
| India’s Edible Oil Outlook | 2026/27 Estimate |
|---|---|
| Sunflower oil imports | 3.5 million tonnes |
| Sunflower oil import growth | +30% |
| Soyoil imports | 5 million tonnes |
| Soyoil change | -10.7% |
| Palm oil imports | Around 8 million tonnes |
| Total vegetable oil imports | 16.5–17 million tonnes |
The estimates indicate that the duty cut could change the composition of India’s edible-oil imports even if total imports remain broadly stable.
Why India Cut the Sunflower Oil Import Duty
The government’s decision was primarily aimed at reducing domestic edible-oil prices.
India imports a large share of the vegetable oil it consumes, making domestic prices sensitive to international commodity prices, freight costs, currency movements and import duties.
The government said the reduction in basic customs duty would lower the landed cost of imported edible oils and help transmit the benefit through the domestic supply chain. It also asked industry associations and companies to pass on the savings to consumers through lower distributor prices and maximum retail prices.
The policy came ahead of the festive season, when household and commercial demand for cooking oils typically increases.
New Import Duty Structure
| Oil | Earlier BCD on crude oil | New BCD |
|---|---|---|
| Sunflower oil | 10% | 0% |
| Soybean oil | 10% | 5% |
| Palm oil | 10% | 5% |
The government also maintained a differential between crude and refined edible oils to support domestic refining activity and discourage excessive imports of refined products.
Sunflower Oil Could Take Market Share From Soyoil
The expected increase in sunflower oil purchases is likely to come partly at the expense of soybean oil.
SEA’s Angshu Mallick expects India’s soyoil imports to decline by 10.7% to around 5 million tonnes in 2026/27.
The reason is the changing price relationship between the two oils.
When import costs change, Indian refiners and buyers can adjust their purchasing decisions based on the relative cost of different vegetable oils.
The sunflower oil duty cut therefore changes the economics of the entire edible-oil basket.
Lower sunflower oil duty → Lower landed cost → Greater price competitiveness → Higher demand → Increased imports
For soyoil exporters, that could mean losing some share of India’s large import market.
Palm Oil Imports Expected to Stay Around 8 Million Tonnes
Palm oil is expected to remain India’s largest imported edible oil despite the change in duties.
SEA estimates palm oil imports at around 8 million tonnes in 2026/27.
However, its outlook is complicated by concerns about global supply and prices.
El Niño-related weather risks could affect palm oil production, while rising biodiesel demand in Indonesia could tighten supplies available for international markets. Industry officials have warned that palm oil could trade at a premium to soybean oil in 2027 if these pressures intensify.
That could make sunflower oil relatively more attractive to Indian buyers.
India Remains Highly Dependent on Imported Edible Oil
India meets nearly two-thirds of its vegetable-oil requirements through imports.
Major suppliers include Malaysia, Indonesia, Argentina, Russia and Ukraine.
This dependence means global commodity markets have a direct impact on Indian consumers.
A weaker rupee can increase the domestic cost of imported oil. Higher freight rates can have a similar effect, while disruptions in exporting countries can reduce availability.
The recent sunflower oil duty cut therefore gives importers some protection against international price pressures.
However, it cannot completely offset global supply disruptions or currency depreciation.
Total Vegetable Oil Imports May Remain Stable
Despite the major shift expected within the import basket, total vegetable oil imports are forecast to remain broadly stable at between 16.5 million and 17 million tonnes in 2026/27.
That means the main change could be which oils India imports, rather than a dramatic increase in the total volume.
Expected Import Mix
Sunflower oil
3.5 million tonnes ↑ 30%
Soyoil
5 million tonnes ↓ 10.7%
Palm oil
~8 million tonnes → broadly stable
This redistribution could affect international prices, shipping demand and the competitive position of major exporting countries.
Domestic Oilseed Production Remains a Risk
India’s import requirement could increase further if domestic oilseed production suffers from unfavourable weather.
Industry estimates suggest total vegetable-oil imports could rise by another 1 million tonnes if lower rainfall hurts the domestic rapeseed crop.
Rapeseed is particularly important because it is one of India’s major winter oilseed crops.
A weaker domestic harvest would increase the country’s dependence on imported oils just as the government is attempting to keep edible-oil prices under control.
This creates an important balancing act for policymakers.
Weak domestic crop → Higher import requirement → Greater exposure to global prices
Weather Could Influence the Final Import Numbers
India’s edible-oil market is influenced by both global and domestic weather conditions.
Internationally, El Niño could affect palm oil production in major producing countries.
Domestically, rainfall patterns can influence the production of rapeseed and other oilseeds.
This means the final 2026/27 import numbers could differ from current forecasts.
If domestic production falls significantly, India may need to import more vegetable oil than currently expected.
Conversely, stronger-than-expected oilseed production could reduce import requirements.
Consumer Prices Are a Key Focus
The government’s immediate objective is to make edible oils more affordable for consumers.
The zero duty on crude sunflower oil reduces the tax component of the landed cost.
However, the size of the benefit reaching consumers depends on several factors.
These include:
- International sunflower oil prices
- Rupee-dollar exchange rates
- Shipping costs
- Refining margins
- Distributor margins
- Retailer margins
- How quickly companies pass through the duty reduction
The government has explicitly asked edible-oil companies to pass the benefit to consumers.
The Indian Vegetable Oil Producers’ Association has also urged companies to reduce retail prices following the duty cut, particularly with the festive season approaching.
Russia and Ukraine Remain Important Suppliers
The sunflower oil market also faces geopolitical and logistical risks.
Russia and Ukraine are major suppliers of sunflower oil to the international market, making Black Sea shipping conditions particularly important for India.
Recent disruptions have already affected shipments to India. Reuters reported that a 20,000-tonne Russian sunflower oil cargo bound for India was cancelled, while around 60,000 tonnes of additional shipments were delayed following damage to Black Sea port infrastructure.
India typically requires around 250,000 tonnes of sunflower oil imports each month.
If Black Sea disruptions continue, the increase in demand created by the duty cut could collide with tighter near-term supply.
What the Duty Cut Means for the Global Market
India is one of the world’s largest edible-oil importers.
A 30% increase in sunflower oil purchases could therefore influence international trade flows.
Exporters in Russia and Ukraine could gain from stronger Indian demand if they can maintain reliable shipments.
Meanwhile, suppliers of soybean oil could face weaker demand from one of their largest markets.
Palm oil exporters will also be watching India’s purchasing decisions because buyers can shift between oils based on relative prices.
The policy change could therefore have effects well beyond India’s domestic cooking-oil market.
The Bigger Picture
India’s decision to eliminate the basic import duty on crude sunflower oil is reshaping the country’s edible-oil market at a time when global prices, weather and geopolitical risks are already creating uncertainty. The expected 30% increase in sunflower oil imports to 3.5 million tonnes suggests that price competitiveness can quickly alter India’s purchasing preferences.
The broader impact will depend on whether the duty reduction is fully passed through to consumers and how global supply conditions evolve. Sunflower oil is expected to gain market share from soyoil, while palm oil imports may remain broadly stable. At the same time, weaker domestic oilseed production or further disruptions in the Black Sea region could push India’s overall import requirement higher.
Looking Ahead
The 2026/27 marketing year will reveal how strongly Indian buyers respond to the lower sunflower oil import cost. The immediate indicators will be monthly import volumes, retail prices and the changing price relationship between sunflower, soybean and palm oils. If sunflower oil remains competitively priced, its share of India’s edible-oil basket could increase substantially.
For consumers, the key question is whether the government’s tax reduction translates into lower retail prices. For refiners and importers, the policy creates a more favourable environment for sunflower oil, but global supply disruptions and currency movements remain significant risks. India’s edible-oil market is therefore likely to remain highly sensitive to both domestic weather and international commodity prices.
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