It’s hard to believe that a country with the world’s second-largest arable land, a legacy of oilseed cultivation, and climatic diversity suited for everything from mustard to coconuts now finds itself with an edible oil import bill of over $12 billion. Yet here we are—saddled with dependence, robbed of local vitality, and cajoled by years of poor policy choices and invisible lobbies.
The edible oil story in India is not a tale of missed opportunities. It is a tale of deliberate avoidance. It’s a story of policy shaped not by prudence or productivity, but by panic, populism, and imported convenience.
The unravelling began in the 1980s, sparked by an unusual debate inside Parliament—on the use of animal tallow in soap manufacturing. There was outrage, orchestrated and organic, across party lines and in the public sphere. Accusations flew that major soap manufacturers were using animal-derived fat in their products, offending religious and cultural sensibilities. The political class, forever alert to moral indignation, saw an opportunity to ride the sentiment.
The solution came fast and easy: import vegetable oils. Palmolein was the immediate beneficiary. It was cheap, abundantly available from Southeast Asian nations, and carried the sheen of a cleaner conscience. Soap makers got their raw material, and the Parliament quietened.
What didn’t get discussed, or even whispered, was the collateral damage.
The sudden liberalisation of edible oil imports—and its continuation through successive governments—spelled doom for India’s traditional oilseed ecosystem. Coconut farmers in Kerala and Tamil Nadu found their prices crashing. The once-bustling expeller units across Andhra, Maharashtra, and Gujarat began to rust. Sesame growers in Odisha and mustard farmers in Rajasthan watched helplessly as their produce went unprocured.
Oilseed cultivation, which supported millions of marginal and small-scale farmers, became economically unviable. Local millers, once cornerstones of rural economies, shut shop. Generations of knowledge—on pressing, refining, blending—began to disappear. And all the while, tankers kept docking at Indian ports with foreign oil.
According to the Ministry of Commerce, India imported 14.1 million tonnes of edible oils in 2022–23. Palm oil and its derivatives made up over 60% of this figure. Indonesia and Malaysia account for a lion’s share, with soybean oil from Argentina and Brazil following close. The import bill crossed $12 billion in 2023—a staggering outflow of foreign exchange for something we once produced in abundance.
Even more striking is the yield gap. India produces just 1.2 tonnes per hectare of oilseeds, compared to 2.4 tonnes globally. The lack of R&D, extension services, and assured procurement has ensured that farmers neither grow oilseeds nor stay on the land.
The winners in this lopsided model are clear: importers, refiners, and storage players. Over the decades, India built a vast infrastructure of edible oil tanks, pipelines, and refineries—not to process domestic produce but to handle imports. Large business houses acquired refineries, tied up with foreign suppliers, and set the stage for vertical integration. They didn’t just handle oil—they handled policy.
Every time a modest tariff hike was proposed to protect domestic farmers, the lobby struck. Arguments of food inflation, poor harvests, and consumer welfare were trotted out. The farmer was always absent from the frame. Even when the Swaminathan Commission recommended stronger MSP mechanisms for oilseeds, it barely nudged policy levers.
In the great nationalist chorus of “Make in India,” edible oil was the silent note. No flagship mission, no structural roadmap, no national mobilisation. A few slogans here and there, some pilot schemes, and forgotten subsidies. Even Niti Aayog’s 2021 report on reducing edible oil dependence has remained a drawing-board exercise.
Meanwhile, countries like Indonesia have offered tax incentives to boost palm oil, while Malaysia subsidised downstream value addition. China has built a diversified oilseed strategy with state-of-the-art research and hybrid seed banks. India, by contrast, has relied on prayer and imports.
While policy stumbled, health experts began raising quiet concerns. Palmolein, though economical, is high in saturated fats. Studies from ICMR and NIN have linked excessive palm oil consumption to rising cardiovascular issues. But when public campaigns sought to warn people or propose blending norms, they were muffled by industry voices warning of “market disruption” and “supply chaos.”
The irony is pungent: we import oil that harms, abandon oil that heals, and still pretend to be champions of local health and enterprise.
This wasn’t a single government’s failure. It was a bipartisan, cross-decade abdication. One that treated oilseed farmers as expendable. Policies flip-flopped between modest protectionism and full-blown liberalisation, never crafting a stable long-term vision. Schemes like the National Mission on Oilseeds and Oil Palm (NMOOP) existed in name but not in scale.
Procurement remained patchy. Extension remained weak. MSP for oilseeds remained ornamental. Even now, when the Prime Minister speaks of Atmanirbhar (self-reliance), edible oils remain conspicuously under-addressed.
Yet all is not lost. India has the soil, the climate, and the manpower to become not just self-reliant but an exporter of niche oils. Mustard hybrids in Haryana, groundnut productivity in Gujarat, and the revival of traditional oils like Niger and Linseed can offer hope. But it needs a mission-mode approach.
One striking innovation that has so far remained under-leveraged is cottonseed oil. India is the world’s second-largest producer of cotton, generating millions of tonnes of cottonseed annually. Cottonseed contains 15–20% oil content, yet its extraction and edible usage remain inefficient and marginal.
Today, cottonseed oil production in India stands at roughly 1.3 million metric tonnes (MMT) annually. According to NITI Aayog, the potential could be nearly double that—adding an additional 1.4 MMT to domestic supply and significantly reducing import dependence. Globally, the cottonseed oil market is expected to reach $6.87 billion by 2030, and India has the natural edge to lead.
Moreover, cottonseed oil finds natural use in both the food and non-food sectors. Its high smoke point and neutral flavour make it ideal for frying and processed foods, while its emollient properties make it suitable for soaps and shampoos—precisely the segment that triggered our edible oil import story decades ago.
With modern refining techniques eliminating toxins like gossypol, cottonseed oil has emerged as a safe, scalable, and underutilized domestic asset. A national push to establish decentralized cottonseed oil refining clusters, with R&D support and farmer incentives, could create a dual market—for edible consumption and industrial applications.
This would not only supplement edible oil supply but also de-risk India’s dependence on palm oil and bring price parity across urban and rural markets.
Some state governments—like Telangana with oil palm or Odisha with sesame clusters—have begun showing results. But they are exceptions. What’s needed is a coordinated national policy that includes R&D, procurement, storage, and retail-level branding. Something akin to the White Revolution.
Beyond the $12 billion headline, there is a human cost. Lost livelihoods. Broken supply chains. Village crushers turned scrap. And the psychological toll of helplessness among rural producers. No spreadsheet captures that.
And yet, the solution lies not in lament but in resolve.
India needs a “Yellow Revolution 2.0”—not as nostalgia, but as strategy. One that sees oil not just as a kitchen commodity but as rural capital.
The coming budget sessions and policy rounds will reveal whether the government has the political will to act. Not through token allocations or ceremonial campaigns. But through structural realignments. The import lobby is strong—but so are the stakes. Reversing this tide isn’t easy. But failing to try is inexcusable.
Because this is not just about edible oil.
It is about edible honour.
It is about restoring the dignity of Indian farmers who were abandoned for cheaper alternatives and reclaiming a legacy that was deliberately uprooted.
Let the oil flow again—but this time, from Indian soil.
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