Indian Imports of Edible oil have risen from 44 lt (lakh tonnes) in 2003-04 to a

projected 140 lt in the current oil year (2015) (based on arrivals till August)
.
Until 2007-08, India s edible oil production exceeded its imports, whereas today t
he latter is double that of the former.
The 140 lt of imports likely in 2014-15 would include about 75 lt of crude palm
oil (CPO), 15 lt of RBD (refined, bleached and de-odourised) palmolein, 30 lt of
crude degummed soyabean oil, 16 lt of crude sunflower oil and 4 lt of crude rap
e (canola) oil.
Reasons for Import of Edible Oil.
1. International Prices are low due to glut in international market. Current lan
ded cost of CPO in India, at around $525 per tonne, is 25 per cent lower than la
st year s levels at this time. RBD palmolein, crude soyabean and sunflower oil are
now trading 30-45 per cent below what they were three years ago. [1]
2. Government do not provide as high MSP (Minimum Support Price) on edible oils
as they provide on Rice and Wheat due to which farmer is hesitant to cultivate t
he edible oils. [3]
3. Since oil palm is a plantation crop whose seedlings take four years to start
yielding fresh fruit bunches, farmers will have to be paid the opportunity cost
of not growing anything during that initial period. [1]
4. Indigenous oilseeds such as rapeseed-mustard and groundnut can, at best, yiel
d 600-800 kg of oil per hectare, while soyabean wouldn t give even half of that. S
imply put, replacing 140 lt imports will require bringing another 28 million hec
tares under oilseeds, which is impossible. [1]
5. Palm imports have been used by many traders as a conduit to access cheap inte
rnational credit, exploiting the large interest rate differential between India
and overseas markets. [1]
6. Consumption itself is growing, having almost doubled to over 200 lt in the la
st ten years, but there are no alternatives to boost edible oil production. [1]
7. Apart from a global glut, the sharp drop in petroleum crude prices have meant
that too little palm is getting diverted to convert into renewable fuels. Last
year, about 30 percent of the 200 million tonnes of palm oil produced in the wor
ld was used for bio fuels and other industrial use. [2]
8. Massive imports have cut local soybean prices by about a fifth in the past fo
ur months, discouraging farmers from expanding oilseed planting. Still, local so
yoil is much costlier than imported palm oil. [2]
Steps to match the demand - supply gap
1. Government has hiked the basic customs duty on all refined edible oils from 1
5 to 20 per cent. [1] [2]
2. Government should promote intercropping (Banana, Maize , Chilies and Vegetabl
es in the first three years), to make oil palm plantation more sustainable and e
conomically viable to. See point no 3 above. [3]
3. Encourage private sector participation and direct farmer processor linkages.
This would ensure adoption of superior crop management practices. [3]
4. Promote oilseed cultivation in areas with low-irrigation, salinity problems.
[3]
5. For different agro climatic zones of the country, develop early maturing and
disease resistant varieties of oilseeds with higher oil content. Need to invest
in research and development sectors by government. [3]
6. Government need to promote rice bran oil as we re the second largest producer o
f rice in the world next to China, with potential to produce about 1 million of
Rice Bran Oil per annum. [3]
7. Generate awareness about TBO (Tree Borne Oil : Tree borne oils grown in fores
t, non-agricultural land=>less harmful to ecology) in public so that it can be e
xported to international chocolate manufacturers. [3]
This answer has been written with the help of following articles. Please read th
em if you want to know more.