What Happened
- India's vegetable oil imports fell 2% to 3.96 million tonnes in Q1 of the 2025-26 oil year (November 2025-January 2026), compared to the same period the previous year.
- Palm oil imports rose sharply by 18% to 1.91 million tonnes, driven by its price competitiveness relative to other edible oils.
- Crude soybean oil imports fell 9% to 1.20 million tonnes, and crude sunflower oil imports declined 15% to 7.59 lakh tonnes.
- In January 2026 alone, palm oil purchases surged 51%, while sunflower oil imports dropped 23%, reflecting a clear price-driven substitution pattern.
Static Topic Bridges
India's Edible Oil Import Dependency and NMEO-Oilseeds
India is the world's second-largest consumer and largest importer of edible oils, with imports meeting approximately 56-60% of domestic demand. To reduce this dependency, the Union Cabinet approved the National Mission on Edible Oils -- Oilseeds (NMEO-Oilseeds) for 2024-25 to 2030-31, with a financial outlay of Rs 10,103 crore. Together with the NMEO-Oil Palm (launched in 2021), the combined missions target increasing domestic edible oil production to 25.45 million tonnes by 2030-31, meeting around 72% of projected domestic requirements.
- India's edible oil consumption: approximately 25-27 million tonnes annually; domestic production: approximately 9.6 million tonnes (2025-26 estimate)
- Import dependency declined from 63.2% (2015-16) to 56.25% (2023-24) but remains structurally high
- NMEO-Oilseeds targets: increase primary oilseed production from 39 MT (2022-23) to 69.7 MT by 2030-31
- Focus crops: rapeseed-mustard, groundnut, soybean, sunflower, sesamum
- Secondary sources: cottonseed, rice bran, tree-borne oils
- NMEO-Oil Palm (National Mission on Edible Oils -- Oil Palm): launched August 2021 with Rs 11,040 crore outlay; targets 6.5 lakh hectares under oil palm by 2025-26, focused on Northeast India and Andaman & Nicobar Islands
- NITI Aayog report on "Pathways and Strategies for Accelerating Growth in Edible Oils Towards Atmanirbharta" released in 2024
Connection to this news: The continued high import volume (3.96 MT in a single quarter) underscores the scale of India's edible oil deficit, validating the need for missions like NMEO-Oilseeds and NMEO-Oil Palm to structurally boost domestic production.
Customs Duty on Edible Oils and Trade Policy
India uses a combination of customs duties and stock limits to manage edible oil prices and availability. Duty structures are periodically revised to balance consumer price stability (lower duties during price surges) with farmer protection (higher duties to support domestic oilseed prices). The government slashed import duties on edible oils multiple times between 2021-23 to control food inflation, but has partially restored them to protect domestic oilseed farmers.
- Basic customs duty (BCD) on crude palm oil, crude soybean oil, and crude sunflower oil was reduced to zero in 2022 to manage inflation, and gradually restored
- Agricultural Infrastructure and Development Cess (AIDC) applies on edible oil imports
- India's edible oil imports are sourced from: Indonesia and Malaysia (palm oil), Argentina and Brazil (soybean oil), Ukraine and Russia (sunflower oil)
- Oil year in India runs from November to October (not the fiscal year)
- Solvent Extractors' Association of India (SEA) publishes monthly import data
- Duty inversion (lower duty on refined vs crude) sometimes disincentivises domestic refining
Connection to this news: The 18% surge in palm oil imports reflects price-driven substitution -- when palm oil is cheaper relative to soybean and sunflower oil, importers shift to palm, illustrating how duty structures and global price movements directly shape India's import composition.
Oil Palm Cultivation in India
Oil palm (Elaeis guineensis) is the most productive oilseed crop globally, yielding 4-6 tonnes of oil per hectare compared to less than 1 tonne for soybean or mustard. India's oil palm cultivation is concentrated in Andhra Pradesh, Telangana, Karnataka, Tamil Nadu, and is being expanded to Northeast India under NMEO-Oil Palm. The crop requires tropical conditions with high rainfall (1,500-3,000 mm) and is well-suited to India's northeastern and coastal regions.
- Global palm oil production dominated by Indonesia (~58%) and Malaysia (~25%)
- India's oil palm area: approximately 3.7 lakh hectares (2024-25); target under NMEO-Oil Palm: 6.5 lakh hectares
- Fresh fruit bunch (FFB) pricing: states fix minimum FFB price; government provides viability gap funding for new plantations
- Gestation period: 4-5 years to first harvest; full productivity by year 7-8
- Environmental concerns: global palm oil expansion linked to deforestation (especially in Southeast Asia); India promotes cultivation on degraded and fallow land to avoid this
- ICAR-Indian Institute of Oil Palm Research (IIOPR) based in Pedavegi, Andhra Pradesh
Connection to this news: The 18% rise in palm oil imports, despite domestic expansion efforts, highlights the gap between India's current production capacity and demand, reinforcing the urgency of the oil palm expansion programme under NMEO-Oil Palm.
Key Facts & Data
- Q1 (Nov 2025-Jan 2026) total imports: 3.96 million tonnes (down 2% YoY)
- Palm oil imports: 1.91 MT (up 18%); soybean oil: 1.20 MT (down 9%); sunflower oil: 0.759 MT (down 15%)
- January 2026 palm oil imports: up 51% YoY; sunflower oil: down 23%
- India's annual edible oil imports: approximately 15-17 million tonnes
- Domestic production estimate (2025-26): 9.6 million tonnes
- Import dependency: approximately 56-60%
- NMEO-Oilseeds outlay: Rs 10,103 crore (2024-25 to 2030-31)
- NMEO-Oil Palm outlay: Rs 11,040 crore (launched August 2021)
- Oil year: November to October