From import dependence, India’s aim to become a net exporter of palm oil is ambitious and achievable

In today’s shifting global landscape, economic resilience has become essential. Governments worldwide are prioritising domestic industries to shield their economies from supply chain disruptions, price volatility, and unforeseen crises such as wars and pandemics. For India, this vision aligns with Atmanirbhar Bharat, a self-reliance initiative that not only aims to serve its population but also supports its economy.

India is on the brink of a palm oil revolution, with NMEO-OP driving its transformation from an import-dependent nation to a key global exporter. Speaking to Bizz Buzz, Belvinder Kaur Sron, Chief Executive Officer, Malaysian Palm Oil Council, explains how India can be on the path to becoming a future palm oil Export powerhouse

In the current context, how important is it for India to attain self sufficiency in edible oil production?

One of the most critical areas where India is pushing for self-sufficiency is edible oil production, particularly palm oil. Edible oils and pulses dominate India’s agricultural imports, with the edible oil import bill reaching significant highs in recent years. Palm oil alone accounts for more than half of India’s edible oil imports, making it a key focus area for self-reliance.

The country imports about 9MT of palm oil annually, spending almost Rs40,000 crore, which constitutes around 56 per cent of its total edible oil imports. This reliance needs to be curbed not only from an economic perspective, but also strategically. The emphasis must be on creating a self-sufficient and sustainable palm oil ecosystem. In the National Mission on Edible Oils – Oil Palm (NMEO-OP) has been launched to address this dependence and boost domestic production while enhancing farmer incomes.

As the world grapples with challenges of food insecurity, climate change, and global supply chain disruptions, countries must recalibrate their agricultural strategies. India, the world’s most populous country and the fastest growing economies, is in a critical position during this global shift. To maintain its growth and achieve goals like becoming a developed economy by 2047 and reaching carbon neutrality by 2070, India must integrate sustainability across all sectors.

In this context, Malaysia’s experience in the sector offers some valuable lessons.

So how has NMEO-OP helped in this regard?

Since its launch in August 2021, NMEO-OP has laid out a clear roadmap for consistent and sustainable palm oil cultivation. It is part of India’s mission to boost growth in the edible oil sector and achieve self-reliance through a multifaceted strategy:

Integrating palm oil cultivation into India’s agricultural landscape through crop retention and diversification, expanding cultivation into suitable wastelands and rice fallow lands, and enhancing productivity through high-quality seeds, advanced farming techniques, and modern production technologies.

India has already identified extensive land resources for palm oil cultivation, aiming to achieve profitability, farmer welfare, and environmental sustainability, thus incorporating the three vital ingredients that have powered the success of major palm oil producers worldwide.

This mission is not just policy, but an execution-focused strategy, which prioritises building upstream capacity through seed gardens and high-quality nurseries, while pushing for a step-change in productivity through improved fresh fruit bunch (FFB) yields and expanded drip irrigation.

Critically, it also seeks to optimise land use by transitioning from low-yield cereal crops to oil palm, where the return per hectare is significantly higher. To ensure farmer viability, the plan integrates intercropping during the four-year gestation period, offering steady income before the first harvest begins.

The mission operates through a collaborative governance model involving central and state authorities, private players, and farmers, all underpinned by transparent fund flows and robust monitoring. This is a decisive move to future-proof India’s edible oil ecosystem driven by innovation, accountability, and the ambition to make India truly self-reliant in this strategic sector.

Is focus on pushing or increasing cultivation enough or does India need something more?

India’s palm oil vision extends beyond cultivation. In its 2024 report, NITI Aayog recommends fostering collaborations with private sector players to accelerate growth in areas such as technology, marketing, seed production, and processing.

The government think tank also emphasises the need for coordinated efforts among government agencies, grower cooperatives, local NGOs, and private sector for sustainable palm oil production.

Another key area for improvement is of palm fruit yields, which are the highest in Malaysia, but remain comparatively low in India. This gap can be bridged through Malaysia’s advancements in seed quality and plantation techniques.

What does NMEO-OP mean for Malaysia?

For Malaysia, NMEO-OP presents an opportunity to share its expertise in palm oil cultivation, processing, and sustainable practices with India. Palm oil is a vital economic driver for Malaysia, contributing roughly 3 per cent to its GDP of around $400 billion.

Palm oil cultivation spans 5.6 million hectares, with large companies employing about 1 million workers and smallholders supporting 4,50,000 households. This industry generates significant income and revenue for these communities, with exports bringing in around $20 billion annually and contributing nearly $4 billion in tax revenue.

The industry supports around 30 companies, serves 4 million customers, and produces approximately $3.5 billion worth of products. It has played a transformative role in Malaysia’s economy and holds the same potential for India.

Interestingly, Malaysia has long been a key supplier of palm oil, exporting the majority of its production and significantly contributing to global food security. Its success story, built on smallholders’ participation, economic growth, and sustainable cultivation, is one that India is well-positioned to replicate on an even larger scale.

How does India stand to gain from the Malaysian experience? What are the lessons India should take from Malaysia?

As palm oil expansion progresses, sustainability remains an important factor. The global industry faces increasing scrutiny over environmental concerns, and India has an opportunity to integrate sustainable practices from the outset.

The Malaysian Sustainable Palm Oil (MSPO) certification scheme ensures adherence to environmental and sustainability standards. As of today, it covers 84 per cent of oil palm planted areas in Malaysia, approximately 5.6 million hectares, and represents around 3,00,000 smallholder farmers nationwide. The certification also aligns with various United Nations Sustainable Development Goals, underlining the country’s commitment to responsible palm oil production.

India’s transition from a major palm oil importer to a potential exporter depends on successfully integrating its production into global markets. Malaysia’s extensive trade networks, well-established regulatory frameworks, and expertise in positioning palm oil as a high-quality, sustainable product could serve as a model for India to expand its exports to key markets. Malaysia also has the capacity to share knowledge with India to realise this transition.

The MSPO model offers a strong template for India to emulate. By developing a certification system with clear standards for land use, ecology, and social welfare, India can boost resilience and position its palm oil as a premium product globally.

The shift from importer to self-reliant and eventually exporting nation is possible with sustainability hardwired into the sector. Malaysia’s experience shows that sustainability is not an expense but a value-driven investment, where profitability, farmer welfare, and environmental responsibility can all coexist.

Is it an achievable goal for India to emerge as a net exporter of palm oil?

Becoming a net exporter of palm oil is both an ambitious and achievable goal for India. With dedicated land resources, a strong policy framework, and sustained government support, the foundation is already in place. However, long-term success will depend on efficient infrastructure, strategic global partnerships, and a firm commitment to sustainability.