India's edible oil demand is projected to reach around 30 million tonnes by 2031, while domestic production is expected to increase to 13.5-14 million tonnes, leaving a demand-supply gap of 16-17 million tonnes, according to Atul Chaturvedi, Chairman of the Asian Palm Oil Alliance (APOA) and Special Advisor and Past President of the Solvent Extractors' Association of India (SEA).
Presenting India's edible oil outlook at the 22nd Indonesian Palm Oil Conference and 2027 Price Outlook in Bali on November 12-13, Chaturvedi said that despite efforts to expand domestic oilseed production and palm cultivation, India's dependence on imports would remain substantial. However, he expects imports to increase only marginally, with additional demand increasingly met through domestic oilseed production.
Import dependence and changing market shares
Chaturvedi's presentation highlighted that India's edible oil imports remained largely stagnant at 16.5-17 million tonnes annually. During the November 2025-October 2026 oil year, imports stood at approximately 16.94 million tonnes, around 5% higher than the previous year.
Palm oil accounted for 8.22 million tonnes of imports, followed by soybean oil at 5.76 million tonnes, sunflower oil at 2.84 million tonnes and rapeseed oil at 0.12 million tonnes. Palm oil's share in total imports has declined to 48%, while soft oils account for 52%. Soybean oil has increased its market share to 35%, while sunflower oil's share stands at 17%.
Indonesia and Malaysia remain the major palm oil suppliers to India, supplying 3.25 million tonnes and 3.32 million tonnes, respectively. Malaysia has been gaining market share. Other suppliers include Papua New Guinea, Thailand and Colombia. Argentina, Brazil, the US, Nepal and China supply soybean oil, while Russia, Ukraine and Argentina are major sunflower oil suppliers.
Chaturvedi noted that India's edible oil market is highly price-sensitive, with consumers and importers readily switching between oils depending on relative prices. Higher import duties have also affected palmolein imports.
Geopolitical and climate risks
The presentation identified geopolitical developments as an increasingly important factor influencing India's edible oil supply and prices. The Russia-Ukraine conflict has disrupted sunflower oil exports through the Black Sea, forcing India to increase imports of soybean and crude palm oil. Higher freight, insurance and commodity costs have added to import expenses.
Tensions in the Middle East have further increased freight costs and energy bills. Indonesia's biodiesel mandate and export policies have also influenced palm oil prices, although palm oil has recently become competitive, leading to increased imports.
Climate-related disruptions are compounding these risks. El Niño is affecting palm production in Southeast Asia, while global oil estimates indicate a possible 2-million-tonne reduction in Indonesian production. In India, deficient rainfall and drought conditions have affected soybean and groundnut crops, besides cottonseed and rice bran oil production.
These developments have implications for India's food security, inflation and trade balance. Food inflation is close to 8%, while the country's trade deficit is around $120 billion. A weakening rupee further increases the cost of imported edible oils.
Domestic production and consumption trends
India's per capita edible oil consumption is estimated at around 18 kg annually. Including approximately 2 kg of butter and ghee, total per capita consumption reaches nearly 20 kg. Consumption growth remains muted at less than 2%, while population growth has slowed to below 0.86%.
Chaturvedi also referred to the Prime Minister's call for a 10% reduction in edible oil consumption. Domestic oils, particularly mustard and groundnut oil, are gaining traction. Palm oil currently accounts for approximately 32% of consumption, followed by soybean oil at 25%, sunflower oil at 12%, mustard oil at 14% and other domestic oils at 17%.
Oilseed and palm missions face implementation challenges
The National Mission on Edible Oils-Oilseeds, launched in October 2024, aims to increase oilseed production from 39 million tonnes to 70 million tonnes by 2030-31. Its financial outlay is Rs 10,103 crore over seven years. The targeted domestic oil production is 25.45 million tonnes by 2030, compared with the current 11-12 million tonnes.
However, Chaturvedi described the financial allocation as inadequate and said progress under the mission had not been very encouraging.
Similarly, the National Mission on Edible Oils-Oil Palm, launched in 2021-22 with an outlay of Rs 11,040 crore over five years, had targeted bringing one million hectares under palm cultivation by 2025-26 and raising crude palm oil (CPO) production to 2.8 million tonnes by 2029-30.
So far, only 0.65 million hectares have been brought under palm cultivation, while CPO production is estimated at just 0.6 million tonnes. Chaturvedi expects production to reach 1.2 million tonnes by 2029, with the area under palm cultivation expanding to one million hectares by 2031.
Import diversification remains a priority
India has started diversifying its sources of edible oil imports by adding Thailand and Colombia as palm oil suppliers and increasing soybean oil imports, including supplies from China. The government has also used import duties as a tool to manage domestic prices.
Effective September 24, 2026, import duties on crude palm oil and soybean oil were reduced by 5 percentage points and those on sunflower oil by 10 percentage points. The effective import duty now stands at 11% for crude palm oil and soybean oil, 5.5% for sunflower oil and 30.25% for palmolein.
Concluding his assessment, Chaturvedi said geopolitical developments had transformed edible oils from a conventional commodity into a strategic food security issue. Given India's heavy dependence on imports and vulnerability to international disruptions, diversifying supply sources, strengthening domestic production and moving towards self-reliance are essential. He also emphasised the need for flexible trade policies to manage changing global supply and price conditions.