India eats more edible oil than it grows. Every year, the country buys in more than half of what it consumes. It is now the world’s single largest importer of vegetable oils. This article covers how much India produces, how much it imports, and why customs duty keeps moving up and down.
MCQ QuestionsMust Know.
The Import Gap.
India Imports More Than It Grows.
- Production. India’s edible oil production stood at around 9.1 million tonnes for MY 2024-25 (USDA FAS estimate).
- Consumption. India’s edible oil consumption was forecast at about 26.3 million tonnes for the same year, and keeps rising.
- The Gap. Roughly 55-60% of India’s edible oil demand is met by imports, not domestic output. This has been true for years, not just one bad harvest.
- World’s Largest Buyer. India is the world’s largest importer of vegetable oils. It imported about 15.96 million tonnes in 2023-24, and around 16.7 million tonnes were projected for 2025-26 (Solvent Extractors’ Association of India).
Three Oils Dominate the Import Bill.
- Palm Oil. The single biggest import, sourced mainly from Indonesia and Malaysia. It makes up over half of India’s total edible oil imports.
- Soybean Oil. The second-largest import, sourced mainly from Argentina and Brazil.
- Sunflower Oil. The third major import, sourced mainly from Russia and Ukraine.
- Domestic Crops. At home, India’s own oilseed output leans on mustard-rapeseed, groundnut, soybean, sunflower, and sesamum. See IndEco0068 — National Mission on Edible Oils – Oilseeds (NMEO-Oilseeds) for the government’s plan to grow these crops faster.
Good to Know.
The Customs Duty Lever.
Duty Goes Up to Protect Farmers, Down to Ease Prices.
- Never Duty-Free. The Government always charges customs duty on imported edible oils. It has never waived duty on all edible oil imports as a blanket, permanent policy.
- 2017 Hike. In November 2017, duty on crude palm oil rose from 15% to 30%. Duty on refined palm oil rose from 25% to 40%. Duty on sunflower, soybean, and mustard/canola oils rose too.
- March 2018 Hike. On 1 March 2018, duty on crude palm oil rose further, to 44%. Duty on refined palm oil (RBD Palmolein) rose to 54%. This came just three months before the June 2018 UPSC Prelims.
- September 2024 Hike. Duty on crude soybean, palm, and sunflower oil jumped from 0% to 20%. Duty on the refined versions of these oils rose from 12.5% to 32.5%.
- May 2025 Cut. Duty on crude palm, soybean, and sunflower oil was cut from 20% to 10%, to bring down retail cooking-oil prices for consumers.
A Short History of India’s Oilseed Push.
- Yellow Revolution. In May 1986, the government launched the Technology Mission on Oilseeds under Prime Minister Rajiv Gandhi. It aimed to boost oilseed output through better seeds and technology.
- Early Success. Oilseed production nearly doubled, from about 12 million tonnes in 1986 to around 24 million tonnes by 1995.
- Consumption Outpaced It. India briefly neared self-sufficiency in the 1990s. Since then, fast-rising consumption has outpaced production growth, and import dependence has climbed back up.
- Rising Appetite. India’s per-capita edible oil consumption has climbed sharply, to roughly 23-24 kg a year — well above the 12 kg a year that the Indian Council of Medical Research recommends.
Test Yourself.
Great to Know.
Why the Gap Persists.
A Yield Problem, Not Just an Acreage Problem.
- Low Yields. India’s oilseed yields per hectare trail major global producers. Oil palm and soybean elsewhere give far more oil per hectare than India’s mustard- and groundnut-heavy mix.
- Oil Palm Push. NMEO-Oil Palm (2021) targets oil palm expansion in North-East India and the Andaman and Nicobar Islands, since palm gives much higher oil yield per hectare than annual oilseeds.
- The Substitution Plan. NMEO-Oilseeds (2024) targets raising oilseed production from 39 million tonnes (2022-23) to 69.7 million tonnes by 2030-31. See IndEco0068 for the mission’s full detail.
A Recurring Policy Balancing Act.
- Forex Drain. Edible oil imports cost India over ₹1.3 lakh crore in foreign exchange every year.
- Price Volatility. Because India imports so much, global vegetable-oil price swings pass directly into Indian kitchens. A palm oil export curb in Indonesia can move Indian retail prices within weeks.
- Two Constituencies, One Lever. Customs duty has to balance two groups at once: domestic oilseed farmers, who want higher duty and higher prices, and consumers, who want lower duty and cheaper cooking oil. This is why duty keeps moving both up and down.
- Global Context. For how India’s imports fit into worldwide vegetable-oil production and trade, see WorldGeo0050 — Edible Oil Production in the World.
Current Affairs.
Latest on India’s Edible Oil Trade.
August 2026: NMEO-Oilseeds Progress Reported to Parliament.
- [Data] In an August 2026 Lok Sabha reply, free seed distribution under NMEO-Oilseeds covered 13.52 lakh hectares in 2025-26, past its 10 lakh hectare annual target. India’s oilseed production rose to 43.06 million tonnes in 2025-26, up from 39.67 million tonnes in 2023-24. So what: real progress on the supply side, though still short of the mission’s 69.7 million tonne target. (Source: KrishiCode, citing a Lok Sabha reply)
- [Data] The same reply put India’s 2024-25 edible oil imports at 160.72 lakh tonnes. Palm oil alone made up 75.17 lakh tonnes of that, or nearly 47%. So what: confirms palm oil, not soybean or sunflower, remains India’s single biggest import-dependence risk. (Source: KrishiCode)
May 2025: Import Duty on Crude Oils Cut.
- [Policy] In May 2025, the Government cut the basic customs duty on crude palm, soybean, and sunflower oil from 20% to 10%. So what: aimed at lowering retail cooking-oil prices for consumers, reversing part of the September 2024 hike. (Source: All India Radio News)
September 2024: Import Duty Hiked to Support Farmers.
- [Policy] Effective 14 September 2024, basic customs duty on crude soybean, palm, and sunflower oil rose from 0% to 20%. Duty on the refined versions rose from 12.5% to 32.5%. So what: aimed at supporting oilseed farmers ahead of the new soybean and groundnut harvest reaching markets. (Source: Malay Mail)
Previous Year Questions
- On India’s costliest farm import, asked as: “Among the agricultural commodities imported by India, which one of the following accounts for the highest imports in terms of value in the last five years?” (UPSC CSP 2019, GS Paper I). Correct answer: (d) Vegetable oils. View this question.
- On the import-versus-production gap, asked as: “Consider the following statements: 1. The quantity of imported edible oils is more than the domestic production of edible oils…” (UPSC CSP 2018, GS Paper I, Q10). Statement 1 is correct — India’s 2017-18 imports (15.12 million tonnes) were roughly double domestic production (7.66 million tonnes). Statement 2 is false — the Government has repeatedly raised, not waived, customs duty on edible oil imports. Correct answer: (a) 1 only. View this question.
Related reading: for the government scheme tackling this import gap, see IndEco0068 — National Mission on Edible Oils – Oilseeds (NMEO-Oilseeds). For how India’s imports fit into global vegetable-oil production, see WorldGeo0050 — Edible Oil Production in the World.
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