India’s Edible oil scene faces challenge of self sufficiency

 India’s edible oil story is paradoxical. Despite being one of the world’s largest producers of oilseeds, the country remains heavily dependent on imports. While policy ambitions now aim for greater self-reliance, the structural realities of cultivation, extraction, and trade make complete independence a challenging goal.

In the 2023–24 oil marketing year (November–October), India imported about 15.96 million tonnes of edible oils, according to the Solvent Extractors’ Association (SEA}.  This dependence translated into an import bill of approximately Rs 1,31,967 crore (~USD 16 billion), making edible oil one of India’s costliest agricultural import items.

In the 2024–25 marketing year, despite little change in volume (around 16 mt), the value climbed to ₹1.61 lakh crore (~USD 18.3 billion), driven by rising international prices. These figures underline a hefty and growing import burden, making India acutely sensitive to global oil-price fluctuations.

Estimates suggest that by 2030–31, the country could produce up to 25.45 million tonnes of edible oils domestically, covering around 72% of its projected requirement but still leaving a residual gap. 
At the heart of the import dependence lie several structural challenges.

First, yields remain low in many regions. According to a NITI Aayog strategy document, the national average oilseed yield is just 1.27 tonnes per hectare, with large variation: while states like Haryana (1.94 t/ha) and Gujarat (1.91 t/ha) outperform the average, important producing states such as Madhya Pradesh (0.99 t/ha) and Maharashtra (0.94 t/ha) lag behind. 

Second, the efficiency of processing is weak. Many small-scale units operate below optimal capacity, leading to sub-par oil extraction. This means that even when seeds are produced, less usable oil is derived, undermining the conversion of production into self-sufficiency.

Third, crop choice and risk for farmers remains skewed. Compared to cereals, oilseeds often face less supportive procurement mechanisms, contributing to volatility. Moreover, factors like rainfall variability further discourage large-scale investment in oilseed farming.

Finally, land and water constraints constrain expansion. Ambitious plans to ramp up water-intensive crops such as oil palm must contend with ecological trade-offs, and not all regions are suited for high-yield oilseed farming.
A few states can play an outsized role in closing India’s oil-import gap:  Known as the “soybean state,” MP contributes over 40% of India’s soybean production. Improving yield here, coupled with better processing, could significantly boost domestic soy-oil availability. Rajasthan and Haryana states dominate in rapeseed-mustard, a key rabi oilseed. Rajasthan alone accounts for nearly half of the country’s rapeseed-mustard output, and together with Haryana, they could scale up more efficiently with improved agronomy and more high-yield, high-oil varieties. Gujarat, Tamil Nadu, Andhra Pradesh, Karnataka are major groundnut producers. According to state-wise data, Gujarat leads groundnut production followed by Andhra Pradesh and Tamil Nadu. Given that groundnut is already well established, yield intensification and better seed systems in these southern and western states could contribute substantially. Though its yields are currently lower than the national average, Maharashtra  has a significant base in soybean, and targeted investments in agronomy and mechanisation could help tap latent potential. 

The National Mission on Edible Oils – Oilseeds (NMEO-Oilseeds), approved by the Cabinet, explicitly targets increasing primary oilseeds production from 39 million tonnes (2022–23) to 69.7 Mt by 2030–31. If successful, this expansion would allow India to meet nearly three-quarters of its edible oil demand domestically — but the distribution of this gain heavily depends on positive outcomes in the key states listed above.

While the goal is ambitious, several headwinds could derail progress:
1.    Competition from other crops: The increasing push for ethanol production (from maize and rice) is shifting farmer incentives, especially in some regions. 
2.    Trade policy tensions: Customs duties remain a double-edged sword. Lowering import duties may control consumer prices but risks undermining domestic producers.
3.    Environmental trade-offs: Expansion of oil palm in ecologically sensitive zones could affect water tables and biodiversity.
4.    Financial and infrastructure bottlenecks: Setting up modern extraction plants requires large investments and strong coordination.

India’s push for edible oil self-sufficiency is laudable and strategically important. But a realistic assessment suggests that complete self-reliance — zero imports — is unlikely, at least in the medium term. The existing policy framework, led by NMEO-Oilseeds, offers a credible pathway to reduce import dependence significantly, but success hinges on coordinated action across high-potential states, infrastructure investment, and agronomic improvements.

In the immediate term, India should focus on becoming import-resilient, not import-isolated. By concentrating on yield improvement in Madhya Pradesh, Rajasthan, Gujarat, Tamil Nadu, and other key states, and by modernizing its extraction and value chains, India can shrink its annual import bill by billions of dollars, reduce exposure to global price swings, and build a more secure edible oil future. 

Through active motivational campaigns Indians need to be persuaded to moderate their obsession with fried food. Gen Z could be the instrument for spearheading the campaign for curtailing edible oil consumption as obese youths would be perceived to be less resilient to ensure faster development.  It should be possible to voluntarily cut down oil consumption through sustained campaigning  promoted by government in tandem with opinion makers.