India Palm Oil Market, By Product Type (Crude Palm Oil, RBD Palm Oil, Palm Kernel Oil, Fractionated Palm Oil), By Application (Food & Beverage, Personal Care & Cosmetics, Biofuel & Energy, Pharmaceuticals, Others), By Nature (Organic, Conventional), By Region, Competition, Forecast & Opportunities, 2021-2031F

Market Overview

India Palm Oil Market was valued at USD 8.20 Billion in 2025 and is expected to reach USD 10.89 Billion by 2031 with a CAGR of 4.89% during the forecast period. India's palm oil market plays a crucial role in meeting the country's vegetable oil demand, driven by its affordability and versatile applications across food processing, personal care, and industrial sectors. The market is influenced by factors such as increasing population, rising disposable incomes, and growing demand for packaged and processed foods. Government initiatives aimed at reducing import dependency by promoting domestic palm oil cultivation are also shaping the market landscape. Additionally, there is a growing emphasis on sustainable sourcing and environmental concerns, prompting industry stakeholders to invest in ethical practices and traceability. The market continues to evolve with changing consumer preferences.

Key Market Drivers

Rising Demand from Food Processing and HoReCa (Hotels, Restaurants, and Catering) Sectors

One of the primary drivers of the India palm oil market is the increasing demand from the food processing industry and the HoReCa segment. Palm oil is a versatile and cost-effective edible oil, widely used in cooking, frying, and as an ingredient in a variety of processed food products such as bakery items, confectioneries, snacks, and ready-to-eat meals. Its high oxidative stability and longer shelf life make it an ideal choice for high-heat cooking and commercial frying, which are essential in the restaurant and catering industries.

Rapid urbanization, evolving lifestyles, and increased consumption of convenience and processed foods are driving the growing demand for palm oil in India. The expansion of quick-service restaurant (QSR) chains and fast-food outlets, particularly in metro and tier-2 cities, is significantly boosting palm oil usage. Its affordability compared to other vegetable oils further reinforces its preference among food processors and hospitality providers nationwide. Supporting this growth, as of December 2023, 24 out of 41 approved Mega Food Parks are operational, providing modern infrastructure along the food processing value chain from farm to market. These initiatives collectively propel the expansion of the palm oil market within India’s food processing sector.

Government Support and Policy Initiatives to Enhance Domestic Production

India is heavily dependent on imports for its palm oil requirements, primarily from countries like Indonesia and Malaysia. To reduce this dependency and improve self-sufficiency, the Indian government has implemented several initiatives aimed at increasing domestic palm oil production. One of the most notable efforts is the National Mission on Edible Oils – Oil Palm (NMEO-OP) launched in 2021, which aims to boost palm oil cultivation in northeastern states and the Andaman and Nicobar Islands.

The mission supports farmers by providing subsidies for planting materials, inputs, and tools while ensuring price assurances through viability gap funding. It also encourages private investment in oil palm processing mills and logistics infrastructure. These efforts aim to increase the area under oil palm cultivation and improve yield productivity, gradually reducing the country’s reliance on imports. The government's National Mission on Edible Oils – Oil Palm (NMEO-OP) aims to increase domestic palm oil production from 400,000 tons to 1.2–1.5 million tons by 2030–31, reducing reliance on imports and enhancing self-sufficiency. This initiative focuses on expanding oil palm cultivation in suitable regions, improving yield through advanced farming techniques, and fostering public-private partnerships to boost production and processing capabilities. These efforts align with India's broader goal of achieving self-reliance in edible oils.

Increasing Demand from the Personal Care and Oleochemical Industries

Beyond its application in the food industry, palm oil serves as a key raw material in the manufacturing of personal care products, soaps, detergents, cosmetics, and oleochemicals. The presence of palm oil derivatives such as fatty acids, fatty alcohols, and glycerin makes it vital for a range of formulations in the beauty and hygiene industry.

With rising disposable incomes, growing urban population, and increased awareness about personal hygiene and grooming, the demand for palm oil-based personal care products is rising rapidly. The Indian personal care market is witnessing steady growth, with a surge in demand for products such as moisturizers, shampoos, soaps, and body lotions—all of which often contain palm oil derivatives.

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Key Market Challenges

Heavy Dependence on Imports and Volatile Global Prices

One of the most significant challenges in the India palm oil market is its overwhelming reliance on imports. India imports around 60–70% of its total edible oil requirements, with palm oil accounting for the largest share. The majority of this palm oil comes from Indonesia and Malaysia. This dependence exposes the Indian market to high volatility in international prices, supply chain disruptions, and geopolitical influences.

Global price fluctuations, driven by factors such as export policies in producing countries, currency exchange rates, and climatic conditions in Southeast Asia, directly impact domestic pricing and availability. For example, any export restrictions or levies imposed by Indonesia, the world’s largest palm oil exporter, can immediately cause supply shortages and price spikes in India. These fluctuations create uncertainty for Indian importers, manufacturers, and consumers, affecting cost structures and profit margins.

Infrastructural and Agronomic Barriers to Domestic Production

While India has ambitious plans to boost domestic palm oil production, several structural challenges impede progress. Oil palm cultivation requires specific climatic conditions, long gestation periods (4–5 years before harvesting), and substantial investment in irrigation, processing infrastructure, and farmer training. Many of the targeted cultivation areas lack adequate infrastructure, such as roads, irrigation systems, and palm oil mills, making it difficult to build a viable value chain.

Farmers are also hesitant to adopt oil palm due to long-term investment risks, lack of familiarity with the crop, and uncertainty over pricing and procurement. Unlike annual crops, oil palm cultivation ties up land for decades, increasing the perceived risk among smallholder farmers.

Key Market Trends

Shift Toward Sustainable and Certified Palm Oil

Sustainability has become a central focus in the global palm oil industry, and India is slowly aligning with this trend. Growing awareness of environmental issues such as deforestation, biodiversity loss, and carbon emissions associated with palm oil production is prompting Indian stakeholders to consider more responsible sourcing practices. Although India currently lags behind Western countries in the adoption of Certified Sustainable Palm Oil (CSPO), interest is steadily increasing among major FMCG companies, retailers, and food processors. According to the report, approximately 60% of the Indian population, particularly millennials aged 25 to 44, demonstrate a strong commitment to sustainable food choices, with the majority actively integrating sustainable practices into their daily routines, which further drivers the market demand.

Large multinational and Indian corporations are beginning to commit to sourcing RSPO (Roundtable on Sustainable Palm Oil) certified oil in response to global pressure, corporate sustainability goals, and expectations from environmentally conscious consumers. Consumer education campaigns and partnerships with sustainability organizations are also contributing to this shift. Over time, sustainable palm oil is expected to become a differentiating factor, particularly for brands targeting urban, health-conscious demographics.

Technological Advancements in Processing and Traceability

Technological innovation is gradually reshaping the palm oil supply chain in India, from processing efficiency to traceability. Refiners and processors are adopting advanced equipment and automation technologies to improve oil extraction rates, reduce wastage, and enhance product quality. This helps in meeting both domestic and export-grade specifications.

At the same time, there is a growing focus on traceability tools, including blockchain-based systems and digital tracking platforms, especially among companies aligned with sustainability goals. These tools help trace palm oil from plantation to final product, providing transparency and accountability in the supply chain.

Segmental Insights

Product Type Insights

Crude palm oil (CPO) was the dominating segment in the India palm oil market due to its widespread use in food processing, cooking oils, and industrial applications. It is preferred for its low cost, high yield, and versatility across sectors. CPO is extensively used by food manufacturers, restaurants, and households, making it a staple in the Indian edible oil industry. Additionally, its import in bulk and easy refining process further strengthen its dominance. The segment continues to benefit from strong demand across both retail and institutional channels, supported by government policies and robust supply chains.

Application Insights

The Food & Beverages segment was the dominating end-use segment in the India palm oil market, driven by extensive usage in cooking oils, processed foods, snacks, and bakery products. Palm oil’s affordability, long shelf life, and functional properties such as high oxidative stability make it a preferred choice among food manufacturers and restaurants. It is widely used in the preparation of fried and packaged foods, margarine, and confectionery. The growing processed food industry, rapid urbanization, and changing dietary habits further support its dominance. As demand for convenient and shelf-stable foods rises, the Food & Beverages segment continues to lead palm oil consumption.

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Regional Insights

The North region was the dominating region in the India palm oil market, primarily due to its large population base, high consumption of edible oils, and presence of key food processing hubs. States like Delhi, Punjab, Uttar Pradesh, and Haryana exhibit strong demand from both households and industrial users. The region's thriving food and hospitality sectors further contribute to the high usage of palm oil in cooking and food preparation. Additionally, established distribution networks, urbanization, and rising disposable incomes support steady consumption. These factors collectively make North India a critical market for palm oil refiners, distributors, and FMCG companies.

Recent Developments

• In July 2024, the Roundtable on Sustainable Palm Oil (RSPO) and the Indian Vegetable Oil Producers’ Association (IVPA) signed a Memorandum of Understanding (MoU) during the IVPA Global RoundTable 3.0 in New Delhi. This collaboration aims to promote sustainable palm oil cultivation and imports in India by raising awareness, advocating for supportive policies, and encouraging the adoption of sustainable practices within the industry.

• In March 2024, 3F Oil Palm inaugurated India's integrated oil palm processing unit in Roing, Arunachal Pradesh, marking a significant milestone in the country's edible oil sector. The processing unit is designed to handle fresh fruit bunches (FFBs) and produce high-quality palm oil, contributing to the government's vision of achieving self-sufficiency in edible oils.

• In March 2025, Patanjali Foods Ltd. is set to establish an oil palm mill in Mizoram's Lawngtlai district, aiming to enhance domestic palm oil production and reduce import dependency. The project aligns with the government's National Mission on Edible Oils – Oil Palm (NMEO-OP), promoting sustainable cultivation in the Northeast.

• In May 2024, Farmley launched the "Palms Off Palm Oil" campaign, transitioning its entire product line to 100% palm oil-free status. This initiative replaces palm oil with healthier alternatives like olive oil, ghee, or zero-oil options.

Key Market Players

• Ruchi Soya Industries Ltd.
• Cofco Agri Ltd.
• Cargill India Private Limited
• Edible Group
• 3F Industries Ltd.
• Godrej Agrovet
• Adani Wilmar Ltd.
• Sundex Process Engineers Pvt. Ltd.
• Brissun Technology Pvt. Ltd.
• Chempro Technovation Pvt. Ltd.

Report Scope:

In this report, the India Palm Oil Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• India Palm Oil Market, By Product Type:

o   Crude Palm Oil

o   RBD Palm Oil

o   Palm Kernel Oil

o   Fractionated Palm Oil

• India Palm Oil Market, By Application:

o   Food & Beverage

o   Personal Care & Cosmetics

o   Biofuel & Energy

o   Pharmaceuticals

o   Others

• India Palm Oil Market, By Nature:

o   Organic

o   Conventional

• India Palm Oil Market, By Region:

o   North

o   South

o   East

o   West

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the India Palm Oil Market.

Available Customizations:

India Palm Oil Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).