NITI Aayog calls for raising import duty on edible oil

NITI Aayog has called for higher import duty on edible oils and a substantial duty gap between crude and refined oil along with incentives to farmers to help India become Atmanirbhar in edible oil production.

In its report on Pathways and Strategy for Accelerating Growth in Edible Oil Towards Goal of Atmanirbharta, the Aayog proposed cluster-based seed hub approach, promotion of bio fortified oilseed varieties, adoption of new technologies and value addition through processing and refining, among others as part of the multi-pronged strategy to enhance oil seed production in the country.

“India’s heavy reliance on edible oil imports, currently accounting for 55-60% of its needs, presents a substantial challenge to its food security and economic stability,” the Aayog said in the report, laying out a roadmap for India to become self-sufficient in oil production.


“A flexible tariff structure, responsive to global market prices, domestic supply and demand trends, and the minimum support price (MSP) for oilseeds, offers a strategic approach,” the Aayog said as it proposes a dynamic trade policy for balanced growth of the sector.

“Implementing a higher import duty regime can safeguard domestic production, while a substantial duty gap between crude and refined oil will benefit processing industries,” it said.

“Aligning support prices with the import duty structure will support farmers, processors, and consumers alike,” it added.

According to the report, balancing off-season storage profitability with consumer affordability is key to help India become self-sufficient.

“Implementing fair pricing structures ensures adequate margins for storage costs, interest, and stakeholder returns, promoting market stability while incentivizing off-season sales,” it suggested.

According to the Aayog, per capita consumption of edible oil has witnessed a dramatic rise over the past decades, reaching 19.7 kilograms per year. This surge has outpaced domestic production and has translated into a heavy reliance on imports to meet domestic demand and industrial needs, it said.

Consequently, the import volume of edible oils reached 16.5 MT in 2022-23, representing a rise of about 67%, highlighting a growing dependence on external sources.

India currently fulfils only 40-45% of its edible oil requirements through domestic production, presenting a significant challenge to the nation’s ‘self-sufficiency’ goal, it added.