The crop at the centre of India’s edible oil self-reliance push

Close up of fresh oil palm fruits and cooking oil, selective focus. | Photo Credit: iStockphoto

For all the debate about edible oil self‑reliance, one fact is still not stated clearly enough: India’s strategy depends on how it handles palm oil. India is the largest buyer of this commodity in the world, importing more than 9 million tonnes in a typical oil year, close to two‑thirds of its total edible oil imports.

The consumption pattern makes this plain. Palm oil accounts for more than 38 per cent of India’s total edible oil use, higher than any other individual oil, and the share is even higher in rural markets, where palm‑based blends are often the only affordable option for low- and middle-income households. Retail prices for common palm oil packs sit between ₹130 and ₹145 a kg, while sunflower oil often trades closer to ₹160–170. When edible oil prices rose nearly 20 per cent in 2024, palm oil held its lower price range more consistently, helping households and manufacturers absorb part of the shock.

India’s dietary authorities, the ICMR and the National Institute of Nutrition, place palm oil within a balanced diet, and it has been part of Indian kitchens for decades. Several states rely on it for subsidised cooking oil schemes, and in Tamil Nadu alone, over 7.5 million ration cardholders depend on these distributions for basic household fat needs. That reliance is why the commodity carries the label of a “poor person’s oil,” a label that hides more than it reveals: keeping a kitchen staple affordable for millions is a pillar of food security, not a second‑grade choice.

The yield story explains why planners keep returning to this crop. Oil palm produces roughly 35 per cent of the world’s vegetable oil on less than one‑tenth of the land used for oil crops, yielding around four tonnes per hectare against roughly 1.2 tonnes for mustard, which is why the National Mission on Edible Oils targets nearly three million tonnes of domestic production by 2030. Removing palm oil without an efficient substitute would shift pressure onto crops needing far more land, creating more environmental loss, not less.

India also does not fully control its destiny on this commodity. Indonesia and Malaysia dominate global production, so trade dynamics there directly affect Indian consumers while importing markets add their own deforestation and traceability rules. India cannot treat palm oil as always available on favourable terms.

There is also a risk in how palm oil is produced, where expansion through clearing forests or peatlands accelerates emissions, and where smallholders lacking clear rights face social tensions. This is where sustainability standards matter, as risk management, not window dressing. The Roundtable on Sustainable Palm Oil (RSPO) now covers 5.1 million hectares across 24 producer countries and accounts for just over 20 per cent of global output; India sourced roughly 431,000 tonnes of certified palm oil in 2024. Global buyers are tightening traceability rules, and uncertified oil risks rejection in markets like the EU, a shift Indian refiners and food brands cannot ignore.

None of this means palm oil should be India’s only answer, but current demand already leans heavily on it, and pretending otherwise helps no one. A more honest position accepts palm oil’s central role and concentrates on shaping it: tying growth to real sustainability performance, and expanding traceability so everyone has a clearer view of where their oil comes from.

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