Building a resilient edible oil policy for India
India’s reliance on edible oil imports remains a critical facet of its food security landscape, and the nuances of this dependence warrant urgent policy attention. Despite the scale of its agricultural output, India maintains its status as one of the world’s largest importers of edible oils. It imported nearly 15.96 million tonne in 2023-24 or 60 per cent of its national requirement, notably palm oil from Indonesia and Malaysia. The scale of these imports, which routinely surpass an annual bill of $15 billion in 2023-24 from $2.2 billion (6 million tonne) in 2006-07, leaves India exposed to increasing prices and supply in markets. Projections for 2024-25 suggest a marginal drop in imports, with estimates around 15.5 million tonne for the full oil year. These vulnerabilities underscore a need for a coherent, foreseeable strategy that can stabilise domestic markets while safeguarding nutritional security.
The government has, in recent years, leaned on swift changes in import duties as a primary lever to counteract immediate price inflation or supply bottlenecks. Such ad hoc interventions, although well-intentioned, inadvertently inject uncertainty into the edible oils value chain. In early 2024, the government slashed the basic customs duty on crude palm oil from 20 per cent to 10 per cent. This unpredictability hampers the ability of importers, refiners and international suppliers to enter into reliable contracts and maintain optimal inventories. The cumulative effect is a dampening of long-term sector investment and an erosion of trust among trading partners, both domestic and foreign. A deliberate shift towards a transparent, multi-year tariff framework rooted in stakeholder engagement and public deliberation would provide the industry with the clarity required to plan and invest in infrastructure, storage and distribution assets.
Nutritional source
Such predictability matters beyond trade facilitation. Edible oils are a foundational calorie source for millions of Indian households, including poor. Volatility in pricing or supply raises the risk of sudden nutritional shortfalls, unduly burdening vulnerable populations. Given that edible oils exist outside the main food security safety nets, any discontinuity in their supply reverberates disproportionately across the poorest segments. This amplifies the imperative for policies that embrace not only supply and price stability, but also explicit nutritional considerations.
India’s policy choices reverberate along the broader international chain, especially in its dealings with Indonesia the international leader in palm oil production. Recent developments such as Indonesia’s expanded biodiesel programme, which diverts a sizeable portion of palm oil towards energy, pose a direct threat to the availability and moderate pricing of edible oils for importing nations like India. Robust, proactive trade diplomacy and long-term supply arrangements with major producers have thus become integral to ensuring both the sufficiency and affordability of edible oil imports.
Balancing ecological priorities
Yet, the country’s growing interest in domestic palm cultivation as a means to buffer external risks introduces a different complexity. While self-reliance is an attractive objective, it must be carefully balanced against ecological priorities. Experience from major producer countries reveals that reckless expansion of palm plantations into ecologically sensitive locations can exacerbate biodiversity loss and place unsustainable pressure on water resources. Instead, India’s domestic palm oil ambitions should be governed by phased, scientifically informed policies that privilege zones deemed ecologically suitable and that impose strict environmental benchmarks.
All of these issues point to the inadequacy of traditional Indian food security paradigms, which typically prioritise grains like rice and wheat. In a context of rising per capita edible oil consumption alongside enduring import dependence, food security policy must evolve. It should deliberately include edible oils as a strategic commodity embedding forward-looking mechanisms such as strategic reserves, bilateral trade agreements and even targeted nutrition-sensitive subsidies to insulate the population from external shocks.
The path forward calls for five interlinked actions. First, authorities must craft a multi-year, consultative tariff and trade framework; this would provide the predictability needed for stakeholders at every stage of the supply chain. Second, strategic partnerships with key supplier nations must be proactively pursued and periodically refreshed, focusing on reliability and mutual benefit. Third, domestic cultivation of oil palm must be aligned strictly with ecological zoning and transparent, science-based standards. Fourth, integrating edible oils into the wider conversation on food security would require targeted subsidies, public distribution pilots and inclusion within the overall national nutrition strategy. Fifth, a dedicated edible oil security committee tasked to anticipate international policy disruptions and recommend timely responses could institutionalise policy foresight.
(Deepak Pareek, Founder & Managing Director, HnyB Tech-Incubations Pvt. Ltd.)
Published on November 2, 2025
