India bets on domestic palm oil to cut its edible oil import bill

what happened

According to Moody's, India is widening oil palm plantings under a government program meant to boost domestic edible oil output. Roughly 300,000 hectares have shifted to the crop in the last five years, and plantings grew by about 52,113 hectares nationally in 2025-26. Andhra Pradesh remains the leader, accounting for around 83% of India's crude palm oil output, while the North-East is emerging as a new growth area, with Assam targeting 375,000 hectares.

Imports still dominate. According to the Solvent Extractors' Association of India, the country brings in about 16-17 million tonnes of edible oil a year, and spent around $18.3 billion on vegetable oil imports in 2024-25. New Delhi aims to produce 25.45 million tonnes of edible oil by 2030-31.

The largest processor, Godrej Agrovet, reports about 80,000 hectares under oil palm and plans to roughly double that figure.

why it matters

For markets, the key question is the long-term balance of supply and demand for vegetable oils. If the program meets its targets, India's reliance on palm oil imports from Indonesia and Malaysia could fall, which matters for those exporters and for global edible oil prices. The project is a multi-decade effort, since palms yield for about two decades and processing capacity needs heavy upfront investment and long lead times.

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