Niti Aayog has recommended raising import duties on edible oils and creating a substantial duty gap between crude and refined oils. The proposal is part of a comprehensive report titled "Pathways and Strategy for Accelerating Growth in Edible Oil Towards Goal of Atmanirbharta," which outlines a multi-faceted approach to achieving self-sufficiency in the sector.
Currently, India imports 55-60 per cent of its edible oil needs, a dependency that poses significant risks to the nation’s food security and economic stability. The Aayog's report stressed the need for a flexible tariff structure that responds to global market conditions, domestic supply and demand, and the minimum support price (MSP) for oilseeds. Such a structure would not only protect domestic production but also stimulate growth in the processing industry by encouraging the processing of crude oil domestically, it said.
The Niti Aayog’s strategy includes incentivising farmers, promoting bio-fortified oilseed varieties, and adopting new technologies to enhance oilseed production. By aligning support prices with the proposed import duty structure, the Aayog aims to support farmers, processors, and consumers alike, creating a balanced growth environment for the edible oil sector.
The report also stressed on the importance of off-season storage profitability, suggesting fair pricing structures to ensure adequate margins for storage costs and stakeholder returns. This, according to the Aayog, will help stabilize the market while encouraging off-season sales.
India’s per capita consumption of edible oil has surged to 19.7 kilogram per year, far outpacing domestic production. As a result, import volumes reached 16.5 million tonne in 2022-23, a 67 per cent increase that underscores the growing dependence on external sources. With only 40-45 per cent of its edible oil requirements met through domestic production, India faces a significant challenge in its quest for self-sufficiency.
