The government wants farmers to produce more oilseeds, reduce import dependence and strengthen domestic agriculture. But the same market is frequently managed through import decisions, tariff changes and price interventions that influence farmer behaviour in the opposite direction.The problem is not that India lacks policy ambition. The problem is that the incentives facing farmers, traders and processors do not always match the government’s long-term objective.India remains one of the world’s largest edible oil importers. Nearly half of domestic edible oil consumption is met through imports, with palm oil, soybean oil and sunflower oil forming a significant share of external dependence. In 2023-24, edible oil imports were around 15.6 million tonnes, reflecting the persistent gap between domestic production and consumption.More than setting targets...To address this dependence, the government launched the National Mission on Edible Oils–Oilseeds (NMEO-Oilseeds) in 2024 with an outlay of ₹10,103 crore. The mission aims to increase oilseed production substantially by 2030-31.However, increasing production requires more than setting targets. Agricultural markets respond to incentives, and farmers respond to expected returns. This is where India’s edible oil policy faces its biggest challenge.A farmer deciding whether to cultivate soybean in Madhya Pradesh, mustard in Rajasthan or groundnut in Gujarat is not responding to India’s import bill. The farmer is comparing income, risk and market certainty.Economics of choiceIf soybean prices are volatile, if processing capacity is limited or if competing crops offer better returns, production targets alone will not change cropping decisions.This is the economics of agricultural choice.Madhya Pradesh, India’s largest soybean-producing state, demonstrates this challenge. Soybean became an important commercial crop because it provided farmers an alternative income source and connected Indian agriculture with global commodity markets.But that same global integration creates vulnerability.Government’s dilemmaWhen international soybean prices decline, domestic farmers face lower returns. When imports increase due to cheaper global supplies, domestic markets adjust. When the government raises import duties to protect farmers, consumers may face higher prices.Each intervention solves one problem while creating another.This is the central policy dilemma.India’s commodity management system often prioritises immediate outcomes: controlling inflation, ensuring availability and protecting consumers. These objectives are important. But frequent market interventions can weaken long-term investment signals.Commodity markets depend on expectations.Uncertainty raises expensesA farmer makes sowing decisions months before harvest. A processor invests in capacity based on future supply. A trader manages inventories based on anticipated policy conditions.When trade rules and tariff structures change frequently, uncertainty becomes an additional cost across the value chain.This does not mean India should abandon imports. Edible oil consumption has increased due to population growth, urbanisation and changing food habits. Domestic production alone cannot immediately replace global supply chains.The issue is not imports versus self-reliance. The issue is whether imports are being used as a strategic buffer or as a substitute for fixing domestic market weaknesses.Shifting to market reformA sustainable edible oil strategy requires a shift from production targets to market reform.Farmers need access to better seeds, improved productivity, stronger extension services and local processing infrastructure. Oilseed-producing regions need stronger value chains so farmers capture a larger share of the final value.More importantly, policy needs consistency.A farmer will not invest in expanding oilseed cultivation if the economic calculation changes every season because of sudden trade measures.India’s edible oil challenge is, therefore, not merely a supply problem. It is a coordination problem between agricultural policy, trade policy and consumer protection.The success of the edible oil mission will not be determined only by how many tonnes of oilseeds India produces. It will depend on whether farmers find oilseeds economically competitive, whether businesses find the market predictable and whether consumers can access affordable edible oils without creating long-term distortions.India does not need fewer policy interventions. It needs better aligned ones. The real measure of self-reliance will not be the size of government targets. It will be whether the market signals reaching farmers support those targets.The author is an Independent Public Policy ResearcherPublished on August 15, 2026