In a move poised to reshape the trajectory of Asia’s edible oil economy, the Indian Vegetable Oil Producers’ Association (IVPA) and the Indonesian Palm Oil Association (IPOA) today signed a landmark Memorandum of Understanding (MoU) in New Delhi. The agreement cements a new phase of bilateral cooperation in the palm oil sector, bringing together the world’s largest palm oil importer and exporter in a pact grounded in trade stability, sustainability, and inclusive growth.

India, which meets more than 60 per cent of its edible oil demand through imports, has relied on Indonesia as its principal palm oil supplier for over a decade. The MoU formalizes this long-standing relationship, creating a framework for closer coordination on supply chain transparency, climate-resilient agriculture, and food security. At the signing ceremony, IVPA President Sudhakar Desai noted, “Today’s MoU signals our shared commitment to a future-ready, transparent palm oil supply chain that benefits consumers and producers alike. This partnership reaffirms the trust between our nations and underscores our shared vision for sustainability and prosperity.”

The three-year agreement establishes a roadmap for joint research and development, collaborative sustainability measures, regulatory alignment, and data-driven trade management. It aims to promote certified sustainable palm oil, boost traceability, empower smallholder producers, and integrate risk mitigation into national food security planning. Strengthened cooperation on market intelligence and policy advocacy is also expected to help stabilize pricing and enhance resilience across the supply chain.

Dr. M. Fadhil Hasan, Head of Foreign Affairs at IPOA, emphasized Indonesia’s commitment to supporting India’s edible oil strategy through responsibly sourced palm oil. “Palm oil is vital to Indonesia’s economy, and through ISPO certification, forest conservation measures, and responsible production, we aim to support India’s food security and climate goals. While challenges like smallholder compliance remain, this partnership will drive innovation and inclusive policies for a resilient supply chain,” he said. IPOA Chairman Eddy Martono reinforced the economic stakes, highlighting that in 2024, bilateral trade reached $ 26 billion, including $ 4.4 billion in palm oil and derivatives alone—a powerful indicator of the sector’s centrality to Indo-Indonesian trade.

Globally, palm oil accounts for nearly 40 per cent of total vegetable oil production, with Indonesia commanding over 58 per cent of global exports. The industry spans more than 16 million hectares—7.4 per cent of Indonesia’s landmass—and represents a shared enterprise between private firms, smallholders, and state-run plantations. The MoU not only reaffirms palm oil’s pivotal role in regional agri-economies but also signals a growing consensus around the need for sustainability-driven trade partnerships.

The agreement will be overseen by a bilateral working group tasked with monitoring implementation, reporting progress annually, and coordinating joint positions in global forums. It also complements active diplomatic engagement between the Indian Ministry of Commerce & Industry and the Indonesian Ministry of Trade, advancing India’s National Edible Oil Mission and Indonesia’s climate-smart export agenda. Together, the two countries are charting a more transparent, resilient, and equitable path forward for one of the world’s most consequential agri-commodities.