India’s love for oily food triples edible oil use, leads to import surge

New Delhi: India’s growing appetite for fried and processed foods has tripled the country’s per capita consumption of edible oil since 2001, leading to a heavy reliance on imports and increased concerns about obesity, heart disease, and diabetes.

From just 8.2 kg per person in 2001, the average Indian now consumes 23.5 kg of edible oil annually, according to Niti Aayog member Ramesh Chand. This exceeds the Indian Council for Medical Research's (ICMR) limit of 12 kg.

Chand said that under the national mission on edible oils, the government is working on enhancing domestic production. “This has two components. One is about palm oil, which yields higher output than crops like soyabean and mustard. The second component is about other oilseed crops in general. We are working on both,” he said.

Data from the Solvent Extractors Association of India (SEA) showed that the current edible oil consumption in the country is 25-26 million tonnes, and domestic production is 11 million tonnes. The remaining 60 per cent comes from imports. The country imports edible palm oil from countries such as Indonesia and Malaysia, soybean oil from Argentina and Brazil, and sunflower oil from Russia and Ukraine.

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While domestic production of oilseeds has increased, it is not enough to cope up with the demand.

According to people associated with the edible oil industry, India was reasonably self-sufficient in edible oil till the 1990s. However, years of low commodity prices made cultivation of oilseeds unremunerative for farmers and decision makers complacent. This led to less attractiveness for the authorities to improve oilseed production and productivity.

"India’s import requirements in the mid-1990s was only 300,000 tonnes,” said B.V. Mehta, executive director at SEA. “With opening up of the economy and rising income levels, India’s consumption kept increasing. Compared to demand, oilseed production stagnated, creating massive imbalance in supply-demand.”

In 2023-24 (estimated), India imported 16 million tonnes (MT) of edible oils, with domestic production fulfilling only 40-45% of the country’s requirements. This situation presents a substantial challenge to the country’s goal of achieving self-sufficiency in edible oils.

Consumption of palm oil in India is now over 37% of the total edible oil consumption, according to data from SEA, Soybean oil comprises about 20%, followed by mustard oil at 14%, and sunflower oil at 13%.

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Palm oil is mainly consumed by the HoReCa (Hotels, Restaurants & Catering), due to demand for out-of-home foods, snack foods, ready-to eat foods, bakery & confectionery. Demand for this oil is expected to grow at 10-15% annually in the coming years.

The increase in consumption has been across the edible oils segment. “In 1998, we started with 100 tonnes of rice bran oil per day. Now, we are having 600 tonnes per day refining capacity. We are witnessing a year-on-year growth of 15%,” said A.R. Sharma, chairman of Ricela Group, primarily known for its rice bran oil production and processing.

Health issues

High consumption of oil can lead to various health issues, primarily due to high calorie and fat content. Excessive oil intake can contribute to weight gain, obesity, and increase the risk of heart disease, type-II diabetes, and certain cancers.

“Oil consumption is very high in Indian society. It’s not limited to fried items, but even in routine food the household consumption is very high and not restricted to tier-I cities where there is little awareness but also in tier-II and tier-III cities,” said Dr. Mansi Chatrath, a nutritionist based out of Panchkula in Haryana. “Not only this, eating out has massively increased over a period of time or even if people are not eating out, they are ordering at home,”

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“The high consumption has led to many health issues and impact cardio-vascular system, digestive system and even the occurrence of fatty liver has become very common these days, which is a cause of concern. Toxicity is building up in the body and also not good for people suffering from diabetes, high blood pressure,” she added.

Scaling up domestic production

The Centre is taking a host of steps to increase self-sufficiency. In October 2024, the Union cabinet approved the National Mission on Edible Oils-Oilseeds (NMEO-Oilseeds), to boost domestic oilseed production and achieving self-reliance. The mission will be implemented over a seven-year period, from 2024-25 to 2030-31, with a financial outlay of ₹10,103 crore.

The newly approved NMEO-Oilseeds will focus on enhancing the production of key primary oilseed crops such as rapeseed-mustard, groundnut, soybean, sunflower, and sesamum, as well as increasing collection and extraction efficiency from secondary sources like cottonseed, rice bran, and tree borne oils. The mission aims to increase primary oilseed production from 39 million tonnes (2022-23) to 69.7 million tonnes by 2030-31.

The Centre also launched National Mission on Edible Oils – Oil Palm (NMEO-OP) in 2021 with an outlay of ₹11,040 crore to boost oil palm cultivation in the country.

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Together, the two missions target to increase domestic edible oil production to 25.45 million tonnes by 2030-31, meeting around 72% of the projected domestic requirement.

This will be achieved by promoting adoption of high-yielding high oil content seed varieties, extending cultivation into rice fallow areas, and promoting intercropping.