India’s reliance on edible oil imports persists despite efforts to boost domestic output

Despite increased domestic production and technological advances, India remains heavily reliant on imports of edible oil, exposing vulnerabilities in its agri-food system and raising concerns over economic stability and food security.

India’s edible oil dependence is not a story of weak demand alone, but of a system that has failed to keep pace with it. Domestic output has risen over the years, yet consumption has grown faster still, leaving more than half of national requirements to be met through imports. That gap has made cooking oil one of the country’s most exposed mass-market essentials, with buyers relying heavily on palm oil and its derivatives from Indonesia and Malaysia.

The scale of that dependence remains striking. The Indian Vegetable Oil Producers’ Association has projected domestic production of 9.6 million tonnes in 2025-26, enough for only about 40% of demand, while imports are expected to reach roughly 16.7 million tonnes. LiveMint reported that the import bill reached ₹1.72 trillion in FY26, underlining how quickly foreign purchases can become a drag on the wider economy. Industry groups have also warned that global supply is becoming more volatile as biofuel mandates and trade shifts reshape the market.

India is not short of technical solutions. Agricultural scientists have already developed more than 1,000 high-yielding varieties and hybrids across oilseed crops, and average productivity has improved sharply since the 1950s. But the yield gap remains large. As the Business Standard article argued, the issue is less a lack of technology than a failure to make oilseeds attractive enough for farmers, who often choose better-paying crops on more fertile land. Roughly three-quarters of oilseed acreage remains unirrigated, which further limits output.

That structural weakness has deep roots in policy. The Technology Mission on Oilseeds, launched in 1986, helped push production close to demand in the early 1990s by managing prices and import duties within a range that protected both growers and consumers. But, according to the Business Standard column, the mission lost authority over time and was burdened with wider responsibilities, diluting its focus. Later versions of the programme did not deliver the same results because they lacked the autonomy and backing needed to reshape incentives.

The broader challenge is that India produces a wide range of possible oil sources, from groundnut, rapeseed-mustard and soyabean to coconut, oil palm, cottonseed and rice bran, yet the system does not consistently reward their cultivation or efficient processing. Recent analysis from other publications points to the same conclusion: low irrigation coverage, weak seed replacement, processing inefficiencies and high import exposure all reinforce the country’s reliance on overseas supplies. Until pricing and procurement policy make oilseeds as profitable as rival crops, import dependence is likely to remain a fact of life.