How India Drifted From Edible Oil Self-Sufficiency to Dependence

Brace for rising cooking oil prices. After one round of hike in March, edible oil companies are contemplating further increases as the West Asia impasse keeps the cost of crude, freight, insurance, packaging materials high. As on May 4, 2026, year-on-year wholesale prices of edible oils are up 3-14%. 

To add to the pressure, Malaysia and Indonesia are diverting more palm oil towards bio-diesel blending. Together, they supply 94% of India’s palm oil imports, while palm oil itself accounts for 59% of India’s total edible oil imports. Unless import duties are lowered further, there will be no immediate relief, despite last year’s cut in duties on crude sunflower, soybean and palm oils from 20% to 10%.

India would not have been in this position had policymakers not mishandled the sector. The country was self-sufficient in edible oils in the late 1980s and early 1990s, when palm oil was barely part of either the Indian kitchen or the agricultural landscape. In 1992-93, India produced 97% of what it consumed. Within a decade, however, imports rose from 3% to 55% of consumption. Today, import dependence stands at 55-60%.

Official reports credit this earlier self-sufficiency to: (a) special projects launched from the 1960s to raise output of nine major oilseeds, groundnut, soybean, rapeseed-mustard, sunflower, sesame, safflower, niger, castor and linseed; (b) the Technology Mission on Oilseeds of 1986, which spearheaded the “Yellow Revolution”; (c) price support for farmers; and (d) tariff barriers. 

The reversal is often attributed to the trade liberalisation of 1991 and the WTO regime after 1995. But it is misleading. India could have continued supporting oilseed farmers while still complying with WTO rules. With bound tariff rates of up to 300% on edible oils, barring soybean and olive oils, it had enough room to shield domestic producers from cheap imports. Industry veterans still recall how India opened the gates to Malaysian palm oil in exchange for railway contracts in 2001. 

Ironically, India is now actively promoting palm cultivation through the National Mission on Edible Oils-Oil Palm, launched in 2021, despite long-standing concerns over its environmental impact. Palm cultivation has been linked globally to deforestation, biodiversity loss and water stress. The health concerns are no less significant. Food brands increasingly advertise “zero palm oil” labels on wafers, cakes, muffins and ice creams to appeal to health-conscious consumers. 

What makes the situation more troubling is that India abandoned a diversified oilseed ecosystem for dependence on the world’s cheapest edible oil. In doing so, it weakened farmer incentives, hollowed out domestic processing capacity, introduced environmental and health risks, and exposed household kitchens to global geopolitical shocks. The problem is not merely high prices today; it is the strategic vulnerability created by decades of policy complacency. India can easily undo the damages by re-learning the past lessons, and ensuring that sectoral and trade policies are not framed in silos.