Critically examine the trend of edible oil in India's international trade. To what extent the policy impetus to oilseed production in India has able to influence this trends. Discuss.

Published: October 27, 2015

Hint: There is such a huge demand supply gap that  India has 60-65% import dependency in edible oils. Thus, international trade in edible oils generates a huge import bill to be paid every year. The import bill for edible oil is around $10 billion which is India’s third-highest overseas spending after oil and gold. This has many problems. It widens the current account deficit and it poses a challenge to the economy. The situation worsens in times of unfavorable monsoon. The domestic demand is increasing rapidly and average productivity is not increasing to keep pace with that demand, India’s international trade in edible oils is mostly on import side. The trend of import dependency remains as it is for last many decades.
Government efforts to increase oilseed products began in 1986 with Technology Mission on Oilseeds. This led to initial increase in productivity but later only sluggish growth has happened. The current government efforts include ISOPOM, National Mission on Oilseeds and Oil Palm (NMOOP), and Technology Mission on Oilseeds and Oil Palm (TMO&OP). All these efforts have increased albeit marginally the oilseed production in the country.  One of the biggest constraints to raising oilseed output has been that production is largely in rain-fed areas. Only one fourth of the oilseed producing area in the country remains under the irrigation.

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