The move could lift edible oil prices and dampen demand and subsequently reduce overseas purchases of palm oil , soyoil and sunflower oil.

After the duty hike announcement, Chicago Board of Trade soyoil extended losses and fell more than 2%.

New Delhi on Friday imposed a 20% basic customs duty on crude palm oil, crude soyoil and crude sunflower oil from Sept. 14, the notification said.

It will effectively increase the total import duty on the three oils to 27.5% from 5.5% as they are also subject to India's Agriculture Infrastructure and Development Cess and Social Welfare Surcharge.

Imports of refined palm oil, refined soyoil and refined sunflower oil will attract 35.75% import duty against the earlier duty of 13.75%.

Reuters reported in late August that India was considering an increase in import taxes on vegetable oils to help soybean growers ahead of regional elections due in Maharashtra later this year.

"After a long time, the government has been attempting to balance the interests of both consumers and farmers," said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage.

The move has increased the likelihood of farmers receiving the minimum support price set by the government for their soybean and rapeseed harvests, he said.

Domestic soybean prices are around 4,600 rupees ($54.84) per 100 kg, lower than the state-fixed support price of 4,892 rupees.

India meets more than 70% of its vegetable oil demand through imports. It buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.

"India's edible oil imports consist of more than 50% palm oil, so it's obvious that the Indian duty hike is going to have a negative impact on palm oil prices next week," said a New Delhi-based dealer with a global trade house.

($1 = 83.8800 Indian rupees)