Stories
India's Edible Oil Dilemma: Balancing Cheaper Imports and Sustainable Sourcing
- •India seeks to balance affordable cooking oil for consumers with sustainable palm oil sourcing, a challenge given high import dependence and rising global prices.
- •The government recently cut import duties on crude sunflower, palm, and soybean oils to moderate domestic prices and curb inflation.
- •India imports two-thirds of its edible oil, making it vulnerable to global price fluctuations; palm oil alone accounts for nearly half of total edible oil imports.
- •Former Commerce Secretary Rajeev Kher emphasizes treating edible oil as a strategic commodity due to India's significant import reliance.
- •Sustainable sourcing, particularly for palm oil, involves certifications and supply chain changes that add costs, which eventually trickle down to consumers.
Key Questions Answered
On September 24, the government reduced the basic customs duty on crude sunflower oil from 10 percent to zero, while cutting the duties on crude palm oil and crude soybean oil from 10 percent to 5 percent to help moderate domestic prices and contain inflationary pressures.
Under the National Mission on Edible Oils-Oilseeds, India aims to raise primary oilseed production to 69.7 million tonnes by 2030-31, up from 39 million tonnes in 2022-23. Additionally, combined with the oil palm mission, the government targets domestic edible oil production to reach 25.45 million tonnes by 2030-31.
Rajeev Kher notes that because India relies on imports for about 60 percent of its edible oil requirements, the commodity is highly sensitive and vulnerable to global prices and supply shocks, meaning it should be treated strategically rather than just imported when shortages happen.
