Key Details
UNCTAD’s Commodities at a Glance 2026: Palm Oil Trade at a Crossroads examines the palm-oil value chain, global trade, sustainability risks and the emergence of deforestation-related import rules. India features prominently as the world’s largest importing market.
Indicator | Report Finding |
|---|---|
India’s total imports, 2023 | 9.35 million tonnes, or 24.7% of reported world imports |
India and China | Together accounted for approximately 40% of global imports during 2019–23 |
Four largest Asian markets | India, China, Pakistan and Malaysia represented 47% of imports during 2019–23 |
India’s crude palm oil imports | Averaged 6.90 million tonnes annually, representing 48.5% of world crude importsduring 2019–23 |
India’s refined-product imports | Averaged 1.82 million tonnes annually, or 6.6% of the global total |
Global export concentration | Indonesia and Malaysia supplied 84% of export volumes in 2023 |
India Imports Mainly Crude Palm Oil
Unlike China and Pakistan, which predominantly purchase refined products, India imports substantial quantities of crude palm oil for processing domestically. It was simultaneously the largest overall importer and the largest crude-oil buyer during the period examined.
Importing crude oil enables India to retain part of the value chain through refining, fractionation, packaging and distribution. India’s import-duty structure also favours this model: the Government widened the duty differential between crude and refined edible oils in 2025 to encourage crude imports and domestic processing.
Yet domestic refining does not remove external dependence. Indian consumers and processors remain exposed to production decisions in Indonesia and Malaysia, international prices, exchange-rate movements and freight disruptions.
Biofuel Policies Could Tighten Export Availability
UNCTAD finds that palm-oil production has grown more rapidly than exports. One explanation is that producing countries are consuming more domestically, including through biodiesel mandates.
These mandates can reduce fossil-fuel imports and create additional demand for producers, but they may also divert crude palm oil from global food markets. For India, this creates a potential tension between the use of palm oil as food in importing countries and as fuel in producing countries.
The report also notes that crude palm oil prices remain volatile despite sustained production growth. Greater domestic consumption by major exporters could therefore affect both the availability and landed price of Indian imports.
Sustainability Rules Are Reshaping Palm Oil Trade
Palm oil yields more oil per hectare than competing crops, but plantation expansion has also been associated with deforestation, biodiversity loss, pollution and labour risks.
Importing economies are increasingly replacing voluntary certification with mandatory requirements. The European Union, United Kingdom and United States have introduced or proposed rules requiring businesses to demonstrate that specified commodities were not linked to deforestation or other environmental harm.
UNCTAD describes this as a major trade-policy shift. Plot-level traceability can strengthen environmental accountability, but complex compliance requirements may exclude smallholders, who produce an estimated 40% of global palm oil.
The report calls for:
Accessible national traceability systems extending to plantation level;
Financial and technical assistance for small producers;
Greater alignment between domestic certification and importing-country requirements;
Continued scrutiny of new measures through the WTO; and
Investment in higher-value products, including oleochemicals, food ingredients and advanced biofuels.
India Is Expanding Domestic Oil-Palm Cultivation
India’s import position gives urgency to the National Mission on Edible Oils–Oil Palm (NMEO-OP). The ₹11,040 crore mission supports planting material, irrigation, intercropping, processing infrastructure and price protection for growers across 15 States.
Between 2021–22 and 2025–26, 2.73 lakh hectares were newly brought under oil-palm cultivation, taking total coverage to 6.40 lakh hectares by March 2026. India had 27 operational processing mills, according to a recent parliamentary reply.
Domestic expansion can reduce some import dependence, but the UNCTAD analysis underlines the need to assess production through a broader lens: land suitability, water use, biodiversity, traceability, farmer returns and processing capacity must develop together.
Policy Relevance
Import security and consumer affordability remain linked. With nearly one-quarter of reported global imports in 2023, India has a major stake in producer-country supply decisions and deserves a stronger place in commodity and biofuel-policy discussions.
Domestic refining is valuable but cannot substitute for supply diversification. India can preserve refining activity while widening its mix of edible oils and overseas suppliers to reduce exposure to a concentrated palm-oil market.
NMEO-OP must avoid reproducing sustainability problems associated with plantation expansion elsewhere. Land selection, water availability and protection of forests and other natural ecosystems should be built into programme appraisal.
Traceability should begin before it becomes a market-access requirement. A credible system covering Indian plantations, mills and supply chains would support environmental oversight, farmer payments and the future competitiveness of domestically produced palm oil.
Edible-oil and biofuel policies require coordinated monitoring. Decisions taken abroad on blending mandates can affect Indian food prices even when global production continues to rise.
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