Fertile Ground — India’s Domestic Palm Oil Initiative is a Springboard for Sustainable Production

India is the world’s largest importer of palm oil, buying over 9 million tonnes annually, or nearly two-thirds of its total edible oil imports. Most of the palm oil supply is imported from producing countries such Indonesia, Malaysia, Colombia and Thailand. In 2020, the import value of palm oil reached USD 5.12 billion. 

To counter India’s reliance on other palm oil producing countries and to address the issue of non-employment among the vast Indian population, the Indian government launched the National Mission on Edible Oils – Oil Palm (NMEO-OP) in August 2021. This new palm oil initiative aims to boost India’s self-sufficiency in edible oils and help increase farm incomes.

Incentivising palm oil production will not only reduce the country’s dependence on imports but also help farmers benefit financially from the growth and expansion of the market. Increasing the domestic production of palm oil is exciting ground for businesses and other stakeholders, presenting an important opportunity to position India as a key country for the sustainable production of palm oil.     

Championing sustainability in India     

With the Indian government's announcement of more than 1.4 billion USD to promote oil palm cultivation in the country under the NMEO-OP, the area under oil palm cultivation is projected to increase by more than three folds to a million hectares, and the production of crude palm oil to 1.125 million tonnes by 2025-26. Under the new scheme, oil palm is offered as an alternative to low yield crops such as sugarcane and paddy, with expansion focused on areas where it can be a rain-fed crop.

“Since 2018, we have been working with our members like WWF-India and specifically the ones buying Fresh Fruit Bunches from oil palm farmers in Andhra Pradesh, like Godrej and Navabharat, to build more capacity for the production of certified sustainable palm oil,” said Kamal Prakash, RSPO Global Deputy Director, Market Transformation and Country Head – India.  “Our focus is to create the enabling environment, capacity, market access and networks in India to make sure that wherever palm oil is produced, it is done sustainably.” 

In 2018, the ‘Sustainable Palm Oil Coalition for India’ (I-SPOC) was formed by RSPO, Centre for Responsible Business (CRB), Rainforest Alliance, and WWF-India. Today over 150 RSPO members operate in India and 72 of them are Indian companies with more than 100 RSPO supply chain certified facilities or licenses.

Currently, training and capacity building work is being carried out in the state of Andhra Pradesh, which is foreseen to help support Indian oil palm farmers to adopt best farming practices and increase their yields and income. Since 2020, RSPO and WWF-India have been working together to train about 400 Indian oil palm farmers and several palm oil mills in Andhra Pradesh, the leading producer of India’s domestic palm oil market, under the RSPO Independent Smallholder Standard. 

Challenges and opportunities

India’s advancement towards sustainable palm oil production is not free from challenges, including a lack of awareness regarding sustainable palm oil among different supply chain actors and the need for increased capacity building and training, in order to move towards sustainable palm oil production. Accelerating the domestic production of palm oil in India must also be coupled with an adherence to sustainability principles in order to mitigate any potential harmful effects on the environment. To tackle these challenges, building multi-stakeholder collaboration and consensus is key.

Against this backdrop, the India Sustainable Palm Oil Dialogue 2021, held in October 2021 by CRB, the India and Sustainability Standards (ISS) and RSPO, underscored how businesses can be a catalyst for sustainable growth and socioeconomic development for communities and environmental preservation. Several Indian businesses have already demonstrated how they can make profits without exploiting communities, forests, and the planet.

One such enterprise is Navabharat Limited (NBL), an edible oil processor based in Andhra Pradesh and the first private company to breed oil palm seeds, which is currently working with RSPO to get its plantation certified. “With the support of RSPO India, NBL conducted a farmer training programme held at Gopalapuram Mandal, with approximately 60 farmers. Once this is completed, NBL will be the first company to be certified as sustainably producing palm oil in India,” said V N Srinivas Prasad, CEO and Director of NBL.

“The integration of sustainability principles in the domestic production initiative will help Indian companies demonstrate their stewardship nationally and globally,” said Rijit Sengupta, CEO Centre for Responsible Business, representing the I-SPOC Secretariat.
Looking ahead, green growth and self-reliance in India can become reality by adopting the shared responsibility approach — a concept strongly promoted by RSPO which encourages various stakeholder groups, including businesses, government, consumers, and civil society, to each commit to making sustainable palm oil the norm. 

“We are keen to work with the central government and state governments as well as other relevant stakeholders and use our networks and resources for India to become self-reliant for edible oils in a sustainable manner,” added Prakash.