The government is expected to raise the import duty on refined edible oil to 10% from the current 7.5%, to protect the domestic oil refining industry.
A cabinet note has already been circulated by the food ministry, sources said on Sunday.
At present, the cost of imported refined edible oil is lower than that of crude edible oil due to the inverted duty structure adopted by exporting countries such as Indonesia and Malaysia. These exporting nations are giving export duty benefits for finished products to traders.
The import duty on crude edible oil is about 2.5%.
Inverted duty structure impacts the domestic industry adversely as it has to pay a higher price for raw material in terms of duty, while the finished product lands at lower duty and costs low. Due to such a structure, Indian traders favour import of refined edible oil rather than crude oils.