Increased customs duties on oils in India have led to a surge in profits for farmers and expectations of export growth.

The Indian government has increased customs duties on crude palm and refined sunflower oil to 20% and 32.5% respectively, benefitting farmers by boosting their earnings. The elimination of the minimum export price and reduction of export duties on onions will also aid farmers. These measures aim to support farmers growing soybeans and oilseeds, especially in Maharashtra and Madhya Pradesh, without impacting market sentiments. It is expected that these changes will increase exports and farmers' income.

The government's decision to raise customs duties on crude palm and refined sunflower oil to 20% and 32.5% respectively will bring "significant" benefits to farmers by increasing their earnings, a senior official announced on Saturday.

According to the finance ministry notification, the basic customs duty on crude palm, soybean, and sunflower oil has been increased from zero to 20%.

The basic customs duty on refined palm, soybean, and sunflower oil has been increased from 12.5% to 32.5%.

The effective duty on these crude and refined oils will increase from 5.5% to 27.5% and from 13.75% to 35.75% respectively.

"This is a significant support for farmers cultivating soybeans and oilseeds. Farmers from Maharashtra and Madhya Pradesh will reap significant benefits as a substantial production of these oilseeds is attributed to them," the official said.

The official added that these measures were made possible due to the government's effective management in curbing domestic prices of edible oils, which have been continuously declining for nearly two years.

"These are very smart moves by the government to support soybean farmers without affecting market sentiments," the official said.

In addition to Madhya Pradesh and Maharashtra, other major oilseed-producing states include Gujarat, Rajasthan, Karnataka, Andhra Pradesh, Uttar Pradesh, Telangana, and Tamil Nadu.

Earlier, the government had set a minimum export price (MEP) of $550 per tonne, essentially meaning that farmers could not sell their produce abroad below this rate.

A notice from the Directorate General of Foreign Trade (DGFT) issued on Friday revoked the MEP with immediate effect.