PALMOILMAGAZINE, NEW DELHI — A recent study has recommended that India, the world’s largest importer of edible oils, establish a long-term, transparent, and consistent tariff framework to end the decade-long policy volatility that has disrupted prices and hindered investment in the edible oil sector.
The report, titled “Tariff Volatility and Stakeholder Dynamics in India’s Edible Oil Sector,” was jointly prepared by the Centre for Economic Studies and Planning at Jawaharlal Nehru University, VeK Policy Advisory and Research, and Assocham.
According to the study, India—which imports around 60–65% of its edible oil needs—has revised its import tariffs more than 25 times since 2015. This frequent adjustment has created uncertainty across the supply chain, affecting international suppliers, industry players, and domestic consumers alike.
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“India’s edible oil tariff policy must evolve from being reactive to becoming a strategic tool,” said TS Vishwanath, Founder and Executive Chairman of VeK Policy Advisory, during the report launch in New Delhi, as quoted by beige-heron-208544.hostingersite.com from India Times on Thursday (October 16, 2025).
Palm oil plays a central role in this dynamic, accounting for about 60% of India’s total edible oil imports. The study therefore recommends the government to establish a predictable tariff band, strengthen market data systems, and formally involve stakeholders before implementing any policy changes.
The research, conducted in support of the National Mission on Edible Oils–Oil Palm (NMEO-OP), also found that abrupt tariff adjustments complicate import planning and increase transaction costs for processors and traders.
Rising import duties often lead to immediate retail price hikes, while tariff reductions do not always translate into lower consumer prices. Meanwhile, inconsistent tariff gaps between crude and refined oils have created uncertainty in refining margins, making it difficult for FMCG companies to plan long-term pricing strategies.
The study also warned that India’s heavy reliance on palm oil makes it the “price anchor” for the domestic edible oil market, but at the same time exposes India to risks stemming from policies in major supplier countries like Indonesia and Malaysia—such as export bans, biodiesel mandates, or geopolitical tensions.
To strengthen market resilience, the study proposed creating an integrated edible oil data portal that tracks global prices, import volumes, and retail trends, supported by AI-based forecasting tools and an early-warning policy simulation system.
It also urged formal consultations with industry associations, farmer groups, and FMCG stakeholders before each tariff revision, as well as capacity-building programs on hedging and futures trading to improve risk management.
These measures, the study concluded, would help stabilize prices, control inflation, boost investor confidence, and support India’s domestic edible oil diversification strategy.
“Stable palm oil tariffs are essential to maintaining market balance, reducing import dependency, and aligning India’s edible oil policies with its broader economic and food security goals,” the study concluded. (P2)
