Import substitution challenges in India's oilseed crop market

India remains one of the world's largest importers of vegetable oil, purchasing nearly half of its total domestic consumption from abroad. In the 2023-24 season, the import figure reached approximately 15.6 million tonnes, with palm, soybean, and sunflower oils being the main items. To reduce dependence on foreign supplies, the national government launched the National Mission on Edible Oils–Oilseeds (NMEO-Oilseeds) program in 2024 with a budget of 10,103 crore rupees, aimed at significantly increasing oilseed production by the 2030-31 season.

However, as analysts note, target indicators alone are not enough, as farmers orient themselves toward income levels, market risks, and price predictability when choosing a crop for sowing. Farmers in states such as Madhya Pradesh, Rajasthan, and Gujarat make decisions about growing soybeans, mustard, or peanuts based on economic efficiency. Frequent changes in trade policy, tariff rates, and import duties create uncertainty that hinders investment in the sector's development.

Constant market regulation, aimed at curbing inflation and protecting consumer interests, often disorients producers and processors. Due to price volatility and sudden state intervention measures, long-term business plans become difficult to execute. Achieving self-sufficiency goals requires shifting the focus from simple planned volumes to market reforms. This implies improving farmers' access to quality seed, developing local processing infrastructure, and strengthening supply chains.

The success of the government mission will depend on how economically attractive growing oilseed crops becomes for farmers, how predictable the market turns out to be for businesses, and the ability to ensure affordable prices for end consumers without distorting market mechanisms. In the current conditions, a key task for the industry is the consistency between agricultural policy measures, international trade rules, and tools for protecting the interests of citizens.