Stabilizing India's Edible Oil Market: The Path to Policy Reform

A new study suggests India should adopt a transparent tariff framework for edible oils to stabilize prices and attract investment. The country has frequently changed tariffs, creating supply chain uncertainty. The study recommends predictable tariffs, better market data, and stakeholder consultation to enhance the sector's resilience.

A recent study advocates for a transparent, multi-year tariff framework in India's edible oil sector to address volatility that destabilizes prices and deters investment. The research indicates tariff changes over 25 times since 2015 have disrupted the supply chain, leading to uncertainty for international suppliers and consumers.

Jointly conducted by the Centre for Economic Studies and Planning at Jawaharlal Nehru University, VeK Policy Advisory and Research, and Assocham, the study urges the establishment of predictable tariff bands and improved market data systems. It highlights palm oil's significant role, accounting for 60% of India's edible oil imports, and warns against external policy risks from key suppliers like Indonesia and Malaysia.

The study proposes an integrated edible oil data portal, AI-based forecasting tools, and risk management strategies to enhance policy adaptation. If implemented, these measures are expected to stabilize prices, boost consumer welfare, and promote domestic oilseed diversification. Ultimately, aligning tariff policy with economic and food security objectives will reduce import dependency and strengthen market confidence.

(With inputs from agencies.)