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India, the world\u2019s biggest vegetable oils importer, is \u200cconsidering lowering import taxes on the commodities to try to curb food inflation, two government and two industry sources said on Wednesday, as the peak demand festival season gets under way.<\/strong><\/p>\n Prices of vegetable oils \u200bin India have climbed by nearly 20% over the last year and a \u200bmeasure that would lower their prices is likely to increase consumption \u2060as households mark festivals from September to November with sweets, snacks and fried treats.<\/p>\n Internationally, \u200bincreased Indian demand would support benchmark Malaysian palm oil and U.S. soyoil futures , analysts say.<\/p>\n India \u200bmeets nearly two-thirds of its vegetable oil demand through imports, mainly palm oil, soyoil and sunflower oil from Malaysia, Indonesia, Argentina, Russia and Ukraine.<\/p>\n Prices have risen because of disruption linked to Russia\u2019s war on Ukraine \u200band extreme weather linked to El Nino and global warming.<\/p>\n One of the government sources said \u200bthe government was seeking to shield consumers, while protecting farmers\u2019 interests.<\/p>\n A government spokesperson did not immediately respond \u200cto \u2060a request from Reuters for comment.<\/p>\n India\u2019s annual retail inflation accelerated further in August, driven by higher food prices.<\/p>\n Instead of making a deep cut in import duties, the government could lower the basic import duty by 5%, which would keep local soybean prices above government-set support \u200blevels and support oilseed \u200bfarmers, a senior industry \u2060official said.<\/p>\n Noting the risk that prices in exporting countries could rise as a consequence of India reducing import duties and spurring domestic \u200bdemand, the industry official said cutting import duties was not an \u200beffective way \u2060to manage prices.<\/p>\n In May 2025, India halved the basic import tax on crude edible oils to 10%. That effectively lowered the total import duty on crude palm oil, crude soyoil \u2060and crude \u200bsunflower oil to 16.5%, as those oils are \u200balso subject to the Agriculture Infrastructure and Development Cess and Social Welfare Surcharge.<\/p>\n After the duty reduction, global palm oil \u200band soyoil prices moved higher.<\/p>\n<\/div>\n