India’s ₹10103 Cr Edible Oil Mission: Boosting Production to 70M Tonnes by 2031

The Indian government has launched the National Mission on Edible Oils–Oilseeds (NMEO-OS) with a budget of ₹10,103.38 crore to boost domestic oilseed production and reduce import dependency. The mission aims to increase production from 39 million tonnes to 70 million tonnes by 2030-31, making India more self-sufficient. Currently, 57% of the country’s edible oil demand is met through imports due to inadequate domestic production.

NMEO-OS focuses on expanding key oilseed crops like rapeseed-mustard, groundnut, soyabean, sunflower, and sesame, along with improving oil extraction from secondary sources. Additionally, the NMEO-Oil Palm initiative promotes oil palm cultivation across 6.5 lakh hectares, particularly in the northeastern states, to strengthen the edible oil sector. To support farmers and encourage local production, the government has raised customs duties on crude and refined edible oils.

The basic customs duty (BCD) on crude soyabean oil, crude palm oil, and crude sunflower oil is now 20%, increasing the effective duty to 27.5%. From September 2024, the BCD on refined palm oil, refined sunflower oil, and refined soyabean oil will rise from 12.5% to 32.5%. These policy measures are expected to support farmers, increase domestic production, and stabilize edible oil prices, paving the way for India’s self-reliance in edible oils.

India’s ₹10103 Cr Edible Oil Mission: Boosting Production to 70M Tonnes by 2031

To tackle its heavy reliance on imported edible oils, the Indian government has rolled out the National Mission on Edible Oils–Oilseeds (NMEO-OS) with an ambitious budget of ₹10,103.38 crore. This initiative aims to ramp up domestic oilseed production from the current 39 million tonnes to 70 million tonnes by 2030-31, reducing import dependency and fostering agricultural growth.

Why This Matters

India currently imports 57% of its edible oil needs, spending billions annually and leaving the economy vulnerable to global price fluctuations. Minister Nimuben Jayantibhai Bambhaniya highlighted this challenge in Parliament, explaining that insufficient domestic output forces reliance on countries like Indonesia, Malaysia, and Argentina for palm, soybean, and sunflower oils. The NMEO-OS seeks to reverse this trend by prioritizing crops like rapeseed-mustard, groundnut, soybean, sunflower, and sesame—staples in Indian diets and agriculture.

How the Mission Works

The mission adopts a two-pronged approach:

1. Boosting Primary Oilseed Cultivation: Farmers will receive support through improved seeds, irrigation, and technology to enhance yields. For example, mustard—a key winter crop—could see expanded cultivation in states like Rajasthan and Uttar Pradesh.
2. Tapping Secondary Sources: The government plans to enhance oil extraction from non-traditional sources such as rice bran, coconut, and cottonseed. This approach not only diversifies supply but also maximizes the use of agricultural byproducts, reducing waste.

Oil Palm: A Game-Changer for the Northeast

Complementing NMEO-OS is the National Mission on Edible Oils–Oil Palm (NMEO-OP), focusing on the northeastern states and Andhra Pradesh. Though oil palm is water-intensive, it produces 4-5 times more oil per hectare than traditional crops. By developing 6.5 lakh hectares of oil palm plantations, India aims to capitalize on the region’s high rainfall and fertile land, creating jobs and boosting local economies.

Protecting Farmers Through Trade Policies

To shield domestic producers from cheaper imports, the government has increased customs duties on edible oils:

• Crude oils (palm, soybean, sunflower) now face an effective duty of 27.5%, up from 20%.
• Refined oils will see duties rise to 32.5% from September 2024, making locally produced oils more competitive.

These tariff changes aim to stabilize prices for Indian farmers, encouraging investment in oilseed cultivation and processing units. For instance, higher duties on refined palm oil could drive demand for domestically grown mustard or groundnut oil.

Expected Outcomes

1. Farmers’ Prosperity: Higher procurement and stable prices will benefit 15 million oilseed farmers, particularly smallholders. States like Gujarat (groundnut) and Madhya Pradesh (soybean) stand to gain from increased income and reduced market risks.
2. Environmental Benefits: Encouraging oil palm cultivation in the Northeast could help reduce deforestation linked to palm oil imports from Southeast Asia.
3. Economic Resilience: Cutting edible oil imports by just 20% could save India over ₹30,000 crore annually, strengthening the rupee and reducing the trade deficit.

Challenges Ahead

Success will depend on addressing infrastructure gaps, particularly in storage and processing facilities in rural areas. Additionally, oil palm has a long gestation period (4–5 years) before yielding profits, requiring sustained government support and upfront subsidies. Climate risks, such as erratic monsoons affecting soybean yields, also call for adaptive strategies, including the development of drought-resistant crop varieties.

A Unified Vision

By combining policy support, technological advancements, and strategic tariffs, India’s edible oil missions represent a comprehensive approach to agricultural reform. If implemented effectively, these initiatives could transform the sector, ensuring food security, supporting rural livelihoods, and positioning India as a global player in edible oil production. The road to 2030 will test the government’s commitment, but the potential rewards—for farmers, consumers, and the economy—make this a mission worth pursuing.

In Summary

India’s edible oil strategy is not just about reducing imports; it’s about redefining agrarian growth. By empowering farmers, optimizing resources, and leveraging smart policies, the country is laying the foundation for a self-reliant future—one where nutritious, homegrown oils take center stage in every Indian kitchen.