The impact of the duty reduction announced in the US-India bilateral trade agreement will be limited for Indian soybean oil importers, though it may marginally ease soybean oil prices in Argentina, according to the Indian edible oil sector.
BV Mehta, Executive Director of the Solvent Extractors’ Association of India (SEA), said crude soybean oil prices in Argentina may go down marginally and may have some impact on price of palm oil, if soy oil comes at zero or +5 per cent (agri cess) duty. However, he said, it has to be seen whether agri cess would also be reduced or not.
Stating that the US origin oil is generally more expensive for India by $30-40 a tonne (plus additional logistic cost), he said the advantage of duty reduction will be less for Indian importers.
Nepal imports
If duty reduction includes refined soybean oil, then the issue of oil inflow from Nepal may also get solved as it may no longer be viable commercially, he said.
India’s total soybean oil import stood at 54.68 lakh tonnes (lt) during the oil year 2024-25 (November-October). Of this, the share of soybean oil imports from the US stood at 1.88 lt. Argentina is the major exporter of crude soybean oil to India. The share of Argentina stood at 28.92 lt during the oil year 2024-25.
He felt that there could be chances of fixing quota for import of soybean oil at nil duty.
Duty free DDGS imports would add additional supply for cattle feed and poultry feed sector in the country. India currently produces around 7.5-8.0 million tonnes of DDGS, replacing soybean and rapeseed meal and DORB (deoiled rice bran) to some extent. It would be a big challenge for the domestic solvent extraction industry producing oilmeals, and Indian maize-based distilleries, he said.
Integral to market pricing, sourcing
Sudhakar Desai, President of the Indian Vegetable Oil Producers’ Association (IVPA), said the recently concluded FTAs and bilateral arrangements with partners such as the US, EU, Australia, UAE and SAFTA members have become integral to market pricing and sourcing decisions.
“These agreements now directly influence landed cost structures, arbitrage flows and refining economics,” he said, noting that further details on potential tariff concessions or quota mechanisms for US soybean oil will provide additional market clarity. Under the deal, there is a quota of 500,000 tonnes of corn DDGS which helps the poultry and aqua sector. However, its impact on Indian soybean prices is yet to be assessed, he said.
Published on February 9, 2026
