Government targets oil palm expansion across 15 States as ₹1,447 crore released during 2021-22 to 2025-26 and 2026-27 action plans approved for ₹1,143.9 crore

Key Highlights

• National Mission on Edible Oils–Oil Palm (NMEO-OP) was launched in 2021-22 with an outlay of ₹11,040 crore.
• Mission targets expansion of oil palm cultivation to strengthen domestic edible oil production and reduce import dependence.
• 2.73 lakh hectares were brought under oil palm cultivation between 2021-22 and 2025-26.
• ₹1,447.21 crore was released to implementing States during the period.
• NMEO-OP is being implemented across 15 States.
• The 2026-27 Annual Action Plans of implementing States have been approved for ₹1,143.9 crore.
• Support includes planting material, irrigation, intercropping, farm machinery, replanting and processing infrastructure.
• A Viability Gap Payment (VGP) mechanism provides price assurance support to oil palm farmers.

India is expanding its domestic oil palm cultivation and edible oil production capacity under the National Mission on Edible Oils–Oil Palm (NMEO-OP), as the government seeks to reduce the country’s dependence on imported edible oils.

The Centrally Sponsored Scheme was launched in 2021-22 with a financial outlay of ₹11,040 crore, including a Government of India share of ₹8,844 crore.

The mission initially targeted bringing 6.5 lakh hectares under oil palm cultivation during 2021-22 to 2025-26.

The information was provided by Minister of State for Agriculture and Farmers Welfare Ramnath Thakur in a written reply in the Rajya Sabha.

Oil palm cultivation expands across 15 States

NMEO-OP is being implemented in 15 States:

Andhra Pradesh, Arunachal Pradesh, Assam, Chhattisgarh, Goa, Gujarat, Karnataka, Kerala, Manipur, Mizoram, Nagaland, Odisha, Tamil Nadu, Telangana and Tripura.

Between 2021-22 and 2025-26, a total of 2.73 lakh hectares was brought under oil palm cultivation.

During the same period, the Government of India released ₹1,447.21 crore to participating States under various components of the mission.

The government has subsequently approved Annual Action Plans for 2026-27 worth ₹1,143.9 crore for implementing States.

Support covers the entire oil palm production cycle

The mission provides support across different stages of oil palm cultivation and processing.

Major interventions include:

• planting material;
• plantation maintenance;
• intercropping;
• drip irrigation;
• farm machinery;
• replanting of plantations;
• seed gardens;
• nurseries; and
• oil palm processing infrastructure.

The scheme also includes a Viability Gap Payment (VGP) mechanism intended to provide price assurance to oil palm farmers.

The combination of cultivation support and price assurance is designed to encourage farmers to adopt oil palm while creating a stronger domestic raw-material base for edible oil production.

Building India’s domestic edible oil ecosystem

NMEO-OP is part of the government’s broader strategy to reduce India’s reliance on imported edible oils.

Oil palm is a high-yielding oil crop, and expansion of domestic cultivation can increase the availability of crude palm oil for domestic processing.

The strategy is being complemented by the National Mission on Edible Oils–Oilseeds (NMEO-OS), launched in October 2024 for the 2024-25 to 2030-31 period.

NMEO-OS focuses on increasing domestic production of conventional oilseeds through improved indigenous varieties, hybrids, certified seeds and stronger seed infrastructure.

Under the programme, 60 Seed Hubs and 50 specialised seed storage units have been sanctioned for production of breeder seed of recently released varieties.

What it means for food and hospitality

Edible oil is a fundamental input for India’s hotel, restaurant and foodservice industry.

From frying and cooking to bakery, snacks, packaged foods and large-scale catering, commercial kitchens consume significant quantities of edible oils.

India’s dependence on imported edible oils means domestic food businesses can be exposed to international commodity prices, currency movements, freight costs and global supply disruptions.

A stronger domestic oil palm sector could eventually improve supply-chain resilience by increasing the domestic availability of edible oil feedstock.

However, the impact on restaurant and hotel costs will depend on several factors, including domestic production volumes, processing capacity, market prices and the broader international edible oil market.

Opportunity for food processors and regional brands

Expansion of oil palm cultivation could also support the growth of domestic oil extraction, refining, processing and distribution infrastructure.

For food companies, this could create opportunities for more stable domestic sourcing and long-term supply contracts.

For hospitality businesses, greater domestic availability could provide an additional sourcing option as operators increasingly focus on managing food costs and building resilient procurement networks.

Tourism and rural economy angle

Oil palm expansion could also have an impact on rural economies in participating States through farm income, processing infrastructure and employment.

For agri-tourism and rural tourism, stronger agricultural value chains can contribute to local economic activity, although oil palm’s tourism impact is likely to remain secondary to its food and industrial significance.

In States such as Goa, Kerala, Karnataka, Tamil Nadu and the North-Eastern region, the programme operates alongside diverse agricultural and tourism economies, potentially creating new linkages between agricultural production, local processing and regional food systems.

The larger edible oil strategy

The government’s approach combines two tracks:

NMEO-OP: Expanding oil palm cultivation and domestic palm oil production.

NMEO-OS: Increasing production of traditional oilseeds through improved seeds, demonstrations, value-chain clusters and post-harvest infrastructure.

Together, the programmes are aimed at strengthening India’s domestic edible oil base and reducing import dependence.

Why the development matters to hospitality

For India’s hospitality industry, edible oil is a basic but significant kitchen commodity. Any sustained improvement in domestic production could help reduce exposure to external supply shocks and strengthen the resilience of food procurement.

The immediate impact on prices, however, is likely to depend on how quickly new plantations become productive and how efficiently the farm-to-processing-to-food supply chain develops.