Industry, however, flayed the government decision saying that such a move will adversely affect the sector as well as farmers.
The Cabinet Committee on Economic Affairs in its meeting took the twin decisions on edible oil, according to sources.
Import of crude edible oil, at present, attracts no duty while it is 7.5 per cent on refined edible oil.
"Earlier difference between import duty on refined and crude edible oils was 7.5 per cent, but now it has come down to 5 per cent, which will lead to more import of RBD palmolein and hurt domestic refiners," Solvent Extractors Association of India (SEA) Executive Director B V Mehta told PTI.
The domestic edible oil refining industry is already facing a tough time due to inverted duty structure of Malaysia and Indonesia, major suppliers of crude and refined palm oil, he added.
"We had urged the government to raise import duty on crude palm oil to 10 per cent and refined palm oil to 20 per cent to protect soyabean and mustard farmers who are facing a tough time in getting good prices due to heavy oil imports," he said.
The domestic refining industry will again approach the government to reconsider this decision, which will affect both the farmers and the industry, Mehta added.
India imports about half of its total domestic requirement of cooking oil.
