Indonesia’s palm oil curbs could open the door for India to step up
The Southeast Asian nation recently moved to keep its ban on the export of palm oil mill effluent and crude used cooking oil in place to bolster its efforts to expand its biodiesel and sustainable aviation fuel programmes.
27/07/2026 (Fortune India) - Indonesia’s move to curb exports of certain oil palm products serves as both a wakeup call and an opportunity for India to accelerate its own domestic production push.
The Southeast Asian nation recently moved to keep its ban on the export of palm oil mill effluent (POME) and crude used cooking oil (UCO) in place to bolster its efforts to expand its biodiesel and sustainable aviation fuel programmes. More recently, it has gone a step further—announcing plans to centralise exports of key commodities such as crude palm oil through a designated state-owned enterprise, effectively tightening control over global supply flows.
However, these new measures signal a clear shift towards greater state control over exports, with potential implications for global supply stability.
Nevertheless, stepping up domestic production of palm oil and weaning itself off exports will help India attain self-sufficiency in a key commodity that is present in everything from ketchup to soaps.
In doing so, it would shield India from global price volatility, bring down its dependence from imports and lift the burden imposed by imports on its exchequer.
And it’s achievable.
The Indian government launched the National Mission on Edible Oils-Oil Palm (NMEO-OP) in 2021 to boost domestic palm oil production. One of the mission’s stated aims was to bring 6.5 lakh hectares of land under oil palm cultivation by 2025-26.
Critics have said the mission is lagging behind its targets. Nevertheless, India had still managed to bring 6.4 lakh hectares under oil palm cultivation as of March 2026.
Output, while behind targets, is also expected to triple to as much as 1.5 million metric tonnes by 2030-31, as the crop begins generating yields, which typically takes anywhere between three to four years.
Another criticism levelled at India’s palm oil ambitions is that the country’s climate is simply not suitable for oil palm cultivation. This is, in fact, not true.
India’s landmass is vast and spans multiple climatic zones. Oil palm is best suited to humid tropical conditions typically found close to the equator, where temperature, rainfall and humidity remain consistently high.
While not all parts of India fall within this narrow equatorial band, several regions, particularly in southern India, offer agro-climatic conditions that are conducive to oil palm cultivation when supported by appropriate irrigation and agronomic practices.
This explains why states such as Andhra Pradesh and Telangana have emerged as leaders in oil palm cultivation, rather than being defined strictly by latitude.
Unsurprisingly, they have scripted India’s biggest oil palm success stories. Andhra Pradesh and Telangana account for 98% of India’s palm oil production.
What’s more, their success with the crop extends to incomes, with farmers in Andhra Pradesh reporting a tripling of incomes since switching over to oil palm cultivation, emphasising its role as a driver of economic prosperity.