Building a Resilient Edible Oil Seed Ecosystem with Long-term Strategic Goals
By Bhavna Shah, Deputy CEO, N.K. Proteins Pvt Ltd. & Vice President, Indian Vegetable oil Producers’ Association & India Country Chair, Environment, Climate Change, Biodiversity & Oceans, All Ladies League
India is a major producer of oilseeds, but its average yield is much lower than the global standard. In order to meet its domestic demand, India imports edible oil at a cost of around $16 billion a year. The industry can achieve sustainable growth and adjust to a constantly shifting global environment with careful planning and focused execution.
Based on recent industry data, India’s oilseed and vegetable oil sector is a key component of its agricultural economy, driven by rising demand and strategic import management. India is the world’s largest importer of edible oils, sourcing nearly 14 million tonnes annually, including palm, soybean, and sunflower oils. Despite being a top oilseed producer, India’s average oilseed yield is significantly lower than the global benchmark, with soybean yields at approximately 1.3 tonnes per hectare, compared to the global average of 2.7-3.0 tonnes.
Key crops like rapeseed, soybean, and groundnut dominate the sector. Recent government interventions, such as increasing import duties and boosting oilseed Minimum Support Prices (MSPs), aim to enhance domestic production and farmer income. These measures are crucial as India spends nearly $16 billion annually on edible oil imports.
India’s vegetable oil sector faces a complex landscape shaped by rising domestic demand, global market fluctuations, and the strategic goal of achieving self-reliance. With 60–65 per cent of its edible oil consumption dependent on imports, the country remains exposed to supply chain disruptions, price volatility, and geopolitical uncertainties.
Policy responses from the Government of India, shaped by shifting global dynamics, highlight the need for a measured approach that balances market stability, farmer welfare, and consumer interests. The government’s decision to maintain the current import duty structure on vegetable oils reflects a calculated response to global uncertainties.
Recent geopolitical events—including the Russia-Ukraine conflict, tensions in the Middle East, and erratic weather patterns—have tightened global edible oil supplies. Rising bio-fuel mandates which account for almost 25 per cent of global edible oil supplies have further amplified market unpredictability. In such a context, abrupt policy adjustments risk destabilising domestic markets, fueling inflation, and straining consumers. The government’s steady policy stance signals its commitment to stability while laying the groundwork for long-term solutions.
However, tinkering with import duties alone cannot resolve India’s deep-rooted challenges in the edible oil sector. India’s oilseed productivity ranks among the lowest globally, with soybean yields averaging just 1 tonne per hectare, far below the global average of 3–4 tonnes per hectare. Systemic issues such as insufficient irrigation, suboptimal seed quality, fragmented landholdings, and limited mechanisation hinder progress. Structural reforms targeting these bottlenecks are imperative for achieving long-term resilience.
The recent import duty hike—up to 20 per cent in September—was intended to support soybean prices and stabilise the domestic market. Simultaneously, the government’s procurement of over 1.5 million tonnes of mustard seeds at MSP strengthened farmer confidence and ensured price stability. These steps reflect a clear policy direction toward boosting domestic oilseed production, though meaningful gains will require productivity-focused initiatives.
The National Mission on Oilseeds, launched in August, marks a critical step toward reducing import dependency. Backed by substantial budgetary allocations, the mission seeks to expand oilseed cultivation into non-traditional regions, introduce high-yield seed varieties, and enhance farming practices. Strengthening supply chains and ensuring fair farmer remuneration are central to this strategy.
Additionally, the Edible Oil and Oilseed Mission announced by the Government of India highlights the country’s long-term vision for achieving self-sufficiency. This integrated initiative focuses on enhancing domestic oilseed production through targeted investments in research, technological advancements, and improved infrastructure. By addressing productivity gaps, fostering sustainable agricultural practices, and enabling greater private-sector participation, the mission aims to build a resilient supply chain while supporting both farmers and consumers.
Achieving long-term self-sufficiency also calls for crop diversification. Oil palm, with its significantly higher yield potential compared to traditional oilseeds, presents a compelling opportunity. Past efforts to promote oil palm cultivation were hampered by water resource concerns and farmer hesitancy. Advances in agricultural technology and improved practices now offer a renewed chance to scale oil palm production sustainably.
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By Bhavna Shah, Deputy CEO, N.K. Proteins
