In his recent public addresses, Prime Minister Narendra Modi has urged Indians to reduce the use of imported oils—both crude and edible—as part of broader austerity measures aimed at conserving foreign exchange. The appeal comes amid a widening current account deficit (CAD) and a weakening rupee.
But what does the conflict in West Asia, a key hub for crude oil and natural gas production, have to do with cooking oil? The answer lies in interconnected commodity markets and India’s heavy dependence on imported edible oils. Mint explains:
What did the prime minister say?
PM Modi urged households to cut cooking oil consumption by about 10%, arguing it would benefit both public health and the national economy. India imports nearly 60% of its edible oil requirement.
The import bill has risen sharply. In the 2024–25 oil year (November–October), India spent over ₹1.6 trillion on palm, soy and sunflower oil imports, roughly equal to the Centre’s annual agriculture spending, excluding fertilizer subsidies. In 2019–20, the bill was about ₹72,000 crore.
Imports continue to climb. Vegetable oil shipments rose 8% year-on-year between November 2025 and March 2026, while rupee depreciation has made imports costlier.
Are global vegetable oil prices rising?
Yes. Edible oil prices rose 5.9% month-on-month in April, reaching their highest level since July 2022, according to the Food and Agriculture Organization’s world food price index. Prices of palm, soy, sunflower and rapeseed oils all increased.
Prices of palm oil, which forms the bulk of India’s edible oil imports, have risen for five straight months. Producers such as Indonesia and Malaysia are diverting more supplies toward biofuels amid higher crude prices. The West Asia conflict has also raised shipping costs, further increasing import prices.
How much have domestic prices risen?
Data from the consumer affairs ministry shows that retail palm oil prices were 6% higher year-on-year as of 12 May. Soy and sunflower oil prices rose 8% and 15%, respectively. Even domestically produced oils such as mustard and groundnut were up 11% and 6%.
Food inflation accelerated to 4.2% in April from 2.1% in January, driven partly by a rise in prices of edible oils and some vegetables. Prices could rise further if monsoon rainfall disappoints.
Why is India so dependent on imports?
India’s oilseed yields remain far below global averages. Soybean yields in the US, Brazil and Argentina are three to four times higher than in India. Traditional Indian oilseeds such as mustard, sesame and groundnut are also less productive than imported alternatives like Southeast Asian palm oil.
Oilseed crops are largely cultivated by marginal farmers with limited irrigation, constraining productivity. When irrigation becomes available, farmers often shift to cereals, which offer lower risk and stronger price support.
India has also not adopted genetically modified (GM) technology in key oilseeds such as mustard and soy, limiting productivity gains.
So, how can domestic oil output be raised?
The government has launched a national oilseeds mission, promoted high-yielding seed varieties, expanded procurement at minimum support prices (MSP), and pushed oil palm cultivation in states such as Andhra Pradesh, Telangana and parts of the Northeast.
But results have been limited so far. India aims to meet 72% of projected edible oil demand through domestic production by 2031.
The core challenge is structural: low import duties help contain food inflation, but they also make it difficult for domestic farmers to compete with cheaper imports. Many farmers therefore prefer crops such as cereals and sugarcane, where returns and government support are more predictable.