Africa as a strategic direction for India’s palm oil imports

India is heavily dependent on palm oil imports, which form the backbone of its domestic vegetable oil market. This reliance creates a structural vulnerability, as any fluctuations in global supply quickly translate into domestic price pressure and contribute to food inflation.

Palm oil accounts for the largest share of India’s imports, sourced mainly from Indonesia, Malaysia, and Thailand. The country imports around 9–10 million tonnes of palm oil annually, while domestic production covers less than 5% of demand. This concentration makes the Indian market highly exposed to changes in supplier countries. An additional risk comes from Indonesia’s decision to expand its biodiesel programme. From July 1, the country will implement a mandate requiring a 50% palm oil blend in diesel fuel. To meet this target, Indonesia will need to divert up to 18 million tonnes of palm oil annually for domestic use, potentially reducing export availability by 8–10%.

According to analysts, India cannot fully replace palm oil imports by increasing soybean or rapeseed production. These crops have significantly lower yields compared to oil palm, and expanding production would require large areas of land already used for essential food crops. Under such conditions, domestic policy can only partially reduce dependence, but not eliminate it.

Africa is emerging as a key diversification direction for India’s palm oil imports, as the region offers a unique combination of factors that can reduce reliance on traditional suppliers. Countries across West, Central, and Southern Africa possess large areas of suitable land, favourable climatic conditions for oil palm cultivation, and significant untapped agricultural potential.

Countries such as Mozambique, Zambia, Zimbabwe, and Malawi are considered promising locations for developing new production chains. Unlike the saturated export markets of Southeast Asia, the African region offers the opportunity not only to expand production but also to build supply infrastructure from the ground up — from plantations to processing facilities.

Improving oilseed yields, managing consumption more efficiently, and developing partnerships with Africa together form a more resilient food security model that helps mitigate future price shocks. In the long term, India could combine investment, technology, and trade mechanisms to develop a stable African segment of the global palm oil market, reducing concentration risks and strengthening the resilience of its food system.

Tags: India, palm oil, Africa, imports