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Updated on: Thursday, August 19, 2021, 08:26 PM IST

Teji Mandi Explains: National Edible Oil Mission - A step towards obtaining ‘Aatmanirbharta’

The oilseed production in India is growing rapidly, but it is no match to the country's growing demand. So, just like most other products, we end up importing a major part of it. Under the edible oil mission, the government has recognised the issue and set out to change the course.
Prime minister Narendra Modi  | PTI Photo

Prime minister Narendra Modi | PTI Photo

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Prime Minister Narendra Modi had an interesting message for people in his independence day speech. In many ways, he reminded India of being an import driven country. It was a brief endorsement of the ‘Make In India’ program of his government and a call to address this concern in years to come.

The PM also announced a new central scheme in this direction. And within a few days, the cabinet approved the National Mission on Edible Oils.

India's Import Cauldron

Now, before understanding the importance of this mission, it's important to have a look at India's trade deficit situation. Historically, our country's foreign trade is facing a current account deficit (CAD). It means we have always been an import-driven country with meagre exports. India's CAD for April-June 2022 was USD (9.74) billion. It states that a country is depending on external credit to sustain its foreign trade. It is one of the factors why our credit rating is low, and trust in our economy is less among the rating agencies and other international institutions.

At a micro-level, higher dependency on imports hamper the prospects of local industry, manufacturers are left to face superior competition, and stop the country from achieving its full potential. It is also a pity that we continue to import those items which can be easily produced at home while it keeps eating away our important foreign reserves.

While this brief introduction makes it clear why India needs to reduce its imports, the second question here is, ‘what does it have to do with cooking oil that we eat, and how is the national edible oil mission going to help?’

Need of the Mission

Edible oil is the third-highest commodity that India imports in terms of value after crude and gold. While crude and gold are different subject matters altogether, this mission will focus extensively on reducing imports of palm oil and other edible oilseeds like groundnut, rapeseed & mustard, soybean, sunflower, sesame, safflower, and niger.

Now, it is important considering that India's vegetable oil economy is the world’s fourth-largest after the USA, China and Brazil. Around 65% of our domestic demand is met through imports from Indonesia and Malaysia, costing up to $10 billion annually.

The mission aims to reduce import dependence to 45% by 2024-25 with an investment of around 11,000 crores in quality seeds and technology. North-eastern states and Andaman and Nicobar Islands are identified to promote palm farming in the initial round.

Closing Comments

As per the Ministry of Agriculture and Farmers' Welfare, palm oil is the best crop. Compared to other oilseeds, vegetable oil extraction is also the highest. But, this crop is still very new in India. Hence, there is an urgent need to intensify efforts to bring more area under palm oil cultivation to enhance production in the country.

The country has ~3 lakh hectares of land under palm oil cultivation, producing around 2.80 lakh tonnes of crude palm oil (CPO) a year. And another 1.9 million hectares of land can be brought under cultivation. It is also crucial considering India's growing needs. According to the mission document, India's vegetable oil imports have increased from 40 lakh tonnes to 1.5 crore tonnes in just two decades, and imports could reach 20 million by 2030.

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Published on: Thursday, August 19, 2021, 08:26 PM IST
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