Achieving Self-Reliance in India's Edible Oil Sector

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Key takeaways

India relies on imports for 55-60% of its edible oil consumption, creating a massive annual import bill of ₹1.75 lakh crore.
Under the National Mission on Edible Oils-Oilseeds, India aims to increase domestic oilseed output to 69.7 million tonnes by 2030-31.
Nearly 75% of India's oilseed cultivation area is rain-fed, contributing to low productivity of 1,353 kg per hectare.
Three main oilseeds account for over 92% of total domestic output: soybean (34%), rapeseed and mustard (31%), and groundnut (27%).

India faces a huge edible oil import bill projected at ₹1.75 lakh crore due to global price spikes, currency depreciation, and biofuel diversions.
Despite several government missions, structural problems like low farm productivity, rain-fed reliance, and weak procurement still slow down self-reliance efforts.

India ranks among the top oilseed producers worldwide, but it remains the largest global importer of edible oils.
During the first six months of the 2025-26 oil year, India imported 7.94 million tonnes of vegetable oil worth ₹87,000 crore.
According to NITI Aayog, India imported 16.5 million tonnes of edible oil in 2022-23, meeting 55-60% of its domestic consumption through imports.
The Economic Survey 2025-26 highlights that between 2014-15 and 2024-25, oilseed area grew by 18%, production rose by 55%, and yield improved by 31%.
Despite these domestic production gains, demand growth for cooking oil continues to outpace total farm output.
Three major oilseeds account for over 92% of total domestic production: soybean (34%), rapeseed and mustard (31%), and groundnut (27%).
India also relies on secondary sources like cottonseed, rice bran, and maize germ, along with tree-borne seeds like mahua and neem.

Cooking oil demand is rising faster than production due to growing population, higher family incomes, rapid urbanisation, and changing eating habits.
Domestic oilseed productivity remains far below its true potential and well behind yield levels in top producing countries.
The government aims to raise average oilseed yield from 1,353 kg per hectare in 2022-23 to 2,112 kg per hectare by 2030-31, requiring a 56% increase.
Nearly 75% of India's oilseed land lacks irrigation, leaving crops vulnerable to unpredictable monsoons and dry spells.
Farmers often prefer growing rice, wheat, or sugarcane over oilseeds because those staple crops offer assured government purchase and stable profits.
Government procurement for oilseeds under the Price Support Scheme remains limited and unpredictable compared to staple food grains.
Cheap imported palm oil from Indonesia and Malaysia often undercuts local prices, especially when import tariffs are lowered.
A weak seed supply chain prevents farmers from getting adequate quantities of high-yielding and disease-resistant seed varieties.
Processing facilities use outdated technology, which leads to lower oil extraction rates and high post-harvest losses.
Cultivation of minor oilseeds like sunflower, safflower, and niger has declined sharply due to poor market prices and high labour requirements.

The government launched the National Mission on Edible Oils-Oilseeds to boost domestic oilseed production through improved technology and seeds.
The National Mission on Edible Oils-Oil Palm focuses on expanding oil palm plantation areas to reduce palm oil import reliance.
The Price Support Scheme protects farmers from sudden price falls by purchasing oilseeds when market rates fall below support levels.
The government announces Minimum Support Prices annually for major oilseeds to encourage farmers to expand crop acreage.

Raising oilseed production from 39 million tonnes to 69.7 million tonnes by 2030-31 requires an ambitious 79% jump in output.
Policymakers face a tough choice between keeping import duties high to help farmers or keeping duties low to control consumer inflation.
Climate change poses severe risks to rain-fed oilseed fields through delayed rains, heatwaves, and unseasonal harvest rain.
Lab research on high-yielding seed varieties takes too long to reach actual farming fields and widespread adoption.
Expanding oil palm plantations raises severe environmental concerns regarding heavy water usage, soil degradation, and loss of biodiversity.
Oilseed production remains concentrated in a few states like Madhya Pradesh, Maharashtra, Gujarat, and Rajasthan, creating vulnerability to local weather shocks.
Low market demand for oilcake reduces profits for processors, which ultimately lowers the prices offered to oilseed farmers.

The government should create transparent price bands and predictable import duty rules to protect local farmers during harvest periods.
Agencies like NAFED must expand physical procurement centres and make quick payments to build farmer trust.
Policy targets should focus on actual oil yield per hectare rather than just raw crop weight.
Developing regional oilseed clusters can link Farmer Producer Organisations (FPOs) directly with modern processing units and testing labs.
Agricultural institutes must supply high-yield seed varieties, while state governments expand micro-irrigation in rain-fed districts.
Farmers should plant short-duration oilseeds in vacant rice fields and adopt intercropping with major food crops.
The country must modernise rice mills and crushing units to extract more oil from rice bran, cottonseed, and maize germ.
Oil palm cultivation must expand strictly on identified water-secure lands without damaging natural forests.
Public campaigns by institutes like ICMR-NIN should promote balanced cooking oil use while an empowered Edible-Oil Board oversees national policy.

Achieving self-reliance in edible oils requires assured price protections, improved seed technology, expanded irrigation, and coherent trade policies to support both farmers and consumers.