Yellow Revolution 2.0: Inside India's ₹11,000-crore bet on domestic palm oil

Summary

India spends billions importing edible oil, but a silent shift is underway. Backed by guaranteed prices, corporate mills, and an ₹11,040-crore mission, farmers are betting on oil palm. Can this 20-year tree usher in a new revolution?

For Kishor Yelati, a farmer from Chintampalle village in Andhra Pradesh's Eluru district, choosing oil palm was not an easy decision. When he decided to plant the crop on roughly 4.8 hectares of ancestral land, doubts were aplenty. But the prospect of relatively stable returns, along with India's growing dependence on imported edible oils, persuaded him to take the plunge.

Oil palm, however, has a long gestation period -- about four years. To keep his farm financially viable during this period, Yelati turned to intercropping. He grew maize during the first two years and groundnut in the third. With the palms now yielding, he grows cocoa alongside oil palm and earns about ₹1.2-1.7 lakh per hectare, excluding expenses.

A similar story is unfolding in neighbouring East Godavari district. Gopal Krishna Reddy of Anaparthi village brought 24.3 hectares under oil palm and earns more than ₹1.2 lakh a hectare. During the three-year gestation period, he grew maize and vegetables to generate interim income.

"The tree bears fruit for two decades, and for farmers it means a steady income," Reddy said.

Reddy estimates that in the last five years, around 4,050 hectares in the district have shifted to oil-palm cultivation, reflecting growing farmer interest in the crop. They have sensed a long-term income opportunity.

Now, well beyond the traditional strongholds of Andhra Pradesh and Telangana, newer states in the North-East -- Assam, Tripura, Manipur, Nagaland, and Arunachal Pradesh -- have also begun large-scale plantation programmes.

The Yellow Revolution 2.0 is on the cards. The first one, launched 1986-87, aimed at increasing the production of nine edible oilseed crops: mustard, groundnut, soybean, sunflower, sesame, safflower, niger, linseed, and castor. The total production of these crops subsequently experienced a boost, growing from 12.6 million tonnes (mt) during the launch year to an estimated 43.06 mt in the 2025-26. Nonetheless, this production growth did not keep pace with population growth and the massive increase in consumption demand from India's food industry.

Mission mode

What has clearly worked is New Delhi's resolve to reduce edible oil imports.

The country's edible oil demand is a mammoth 26 mt a year now, with the domestic market valued at $34.75 billion. Of this, close to 16-17 mt is imported, with palm oil being the largest component, as per the Solvent Extractors' Association of India (SEA), an industry body. In 2024-25, India spent around $18.3 billion on vegetable oil imports. The country imports soybean oil from Argentina and Brazil, palm oil from Indonesia and Malaysia, and sunflower oil from Ukraine and Russia.

The government has set itself a target to produce 25.45 mt of edible oil by 2030-31, which is expected to cover roughly 72% of the country's projected requirement at that point. Within this framework, the target is to raise crude palm oil production to 2.8 mt.

The biggest advantage of oil palm is its higher productivity compared to other oilseeds, Mint had earlier reported. A palm field can yield between 20-25 tonnes of fresh fruit bunches per hectare in ideal conditions, or about 4-5 tonnes of palm oil and about half a tonne of kernel oil. That is nearly five times the yield compared with traditional oilseeds such as mustard and groundnut. This is the reason palm oil is the cheapest among all oils -- it is available for less than ₹154 a litre at the retail level today. From packaged savouries and samosas to soaps and cosmetic products, it is ubiquitous in our daily lives.

The mission mode button has therefore been switched on. In August 2021, the 'National Mission on Edible Oils-Oil Palm (NMEO-OP)' was launched with a budget of ₹11,040 crore.

In the last five years, close to 300,000 hectares have shifted to oil palm cultivation. This area spans 15 states including Andhra Pradesh, Telangana, Karnataka, Kerala, Odisha, Chhattisgarh, Gujarat, Assam, and Tripura.

The more meaningful story is the quality and durability of the expansion achieved so far.

According to processors, oil palm isn't a crop that responds to administrative timelines alone -- it demands the right agro-climatic zones, reliable irrigation, and patient farmer engagement. Every hectare planted through this disciplined approach is built to last for the next 20 years.

The mission's structure, viability pricing support, and dedicated focus on processing infrastructure have given industry a stable policy runway to plan long-term investment, which is exactly what a 20-year crop requires.

On the farmer side, the core incentive is price assurance. The government has structured this through a twin-pricing mechanism: a monthly 'formula price' linked to the market rate, and an annual viability price fixed by the Centre. When the formula price dips below the viability price, farmers receive the difference directly as a viability gap payment through direct benefit transfer.

Farmers also receive free, high-quality seeds of the latest high-yielding varieties, along with training in good agricultural practices.

For the industry, the mission supports investment in mill establishment, with the funding share weighted far more heavily toward the Centre for the North-East and the Andaman and Nicobar Islands. In addition, modernization of post-harvest infrastructure, particularly oil mills, is encouraged.

"The mission is implemented through a cluster-based approach, with over 600 value chain clusters identified across the country and managed by partners such as farmer producer organizations and cooperatives," said a government official who wished not to be identified.

Two states

Today, Andhra Pradesh remains the clear leader nationally, contributing roughly 83% of India's total crude palm oil production. The state extended that lead again in 2025-26, adding 30,364 hectares of new plantations -- with Eluru district alone accounting for nearly 12,140 hectares -- while Telangana added around 12,000 hectares in the same period.

Together, the two states drove the bulk of India's roughly 52,113-hectare national expansion that year.

What is driving their continued dominance is a combination of factors: suitable agro-climatic conditions, particularly assured rainfall and groundwater in the coastal and irrigated belts; strong state-level administrative focus on oil palm as a horticulture priority; processing capacity built up close to the plantations over time; and a generation of farmers with two to three decades of practical experience with the crop.

What is new and exciting is the emergence of the North-East as a serious growth frontier. Assam, in particular, has set a target of 375,000 hectares under oil palm and has actively brought in large processors to build local infrastructure from the ground up.

Private affairs

Private companies, such as Godrej Agrovet and Patanjali Foods, are now partnering with farmers for oil palm cultivation.

"We have seen momentum since NMEO-OP launched," said Sunil Kataria, chief executive officer and managing director, Godrej Agrovet Ltd.

The company is India's largest oil palm processor -- its current national footprint stands at roughly 80,000 hectares, and it is targeting a doubling of that to around 150,000 hectares. "We added close to 17,000 hectares last year alone," said Kataria.

Fresh fruit bunches begin losing oil quality within roughly 24 hours of harvest, so processing capacity has to be planned in lockstep with plantation growth. This is one of the more demanding parts of scaling the sector -- mills require significant upfront capital and long lead times to build, while plantations, once established, keep producing for two decades or more.

Godrej Agrovet has tried to address this problem through its recently inaugurated Integrated Oil Palm Complex in Khammam, Telangana. It brings together seed and genetics, a nursery, an R&D centre, and a processing mill. A refinery has also been planned at this location. The cumulative investment in the project will be around ₹300 crore once fully operational.

Patanjali Foods, too, is building an integrated 'plantation-to-mill' value chain.

"Patanjali Foods has adopted an ambitious long-term vision for the development of India's oil-palm sector, with a target of developing 500,000 hectares of oil-palm plantations by 2030," said Sanjeev Asthana, CEO, Patanjali Foods.

As of 2025-26, over 110,000 hectares have been covered under plantation development by the company, involving 80,000 farmers.

Meanwhile, Patanjali Foods has invested in the production and availability of planting material, establishing 53 nurseries. Alongside, the company has worked on an ecosystem comprising collection centres and procurement points to facilitate purchase from farmers.

As the palm sector lacks automation, companies such as Patanjali Foods have introduced mechanization to improve operational efficiency. Lightweight telescopic harvesting poles -- tools used to cut oil palm fresh fruit bunches, coconuts, and areca nuts from the ground without having to climb the tree -- are one example. Such interventions, which reduce physical strain, are particularly important as plantations mature and harvesting requirements increase.

"The telescopic harvesting pole makes palm harvesting safer and easier. It saves labour costs and time, making it a practical solution," said R. Krishna Reddy, a farmer from Godavari district in Andhra Pradesh.

Besides Patanjali Foods and Godrej Agrovet, there are over three dozen private sector stakeholders engaged in the mission. The long list includes 3F Oil Palm Pvt. Ltd, AP Oilfed, Telangana State Co-operative Oilseeds Growers Fed. Ltd, KE Cultivation Pvt. Ltd, Kalpavriksha Oil Palm Pvt. Ltd, Pre-Unique India Ltd, Navabharat Agro Product Andhra Pradesh, and Ajantha Soya Ltd.

The way forward

While the mission has come a fair distance, some experts still see scope for improvement and closer coordination.

"India's path to palm oil self-sufficiency requires a balanced, ecosystem-based approach that combines scientific innovation, institutional capacity, infrastructure development, private sector engagement, and sustainability frameworks," said Sumit Roy, deputy general manager-palm programme, Solidaridad Asia, a civil society and non-profit organization.

A white paper, Charting the path to palm oil self-sufficiency in India, co-written by Solidaridad Asia, the Solvent Extractors' Association of India, and the Asian Palm Oil Alliance, provides a blueprint to reduce New Delhi's reliance on palm oil imports while boosting domestic production. It also provides a roadmap to achieve up to 50% self-sufficiency by 2047, potentially saving tens of billions of dollars in foreign exchange.

The paper outlines key recommendations for the government, including the repurposing of low-return agricultural lands and a focused strategy to improve yields from the current 2.4 tonnes per hectare to 4-5 tonnes per hectare. High-quality planting material, improved agronomic practices (such as farmer training in scientific planting, irrigation, fertilization, and pest control), timely access to inputs, and regular monitoring of crop performance could significantly aid the cause. Large private sector companies have already introduced many of these practices.

Meanwhile, there could be lessons drawn from other sectors, particularly India's dairy industry. The key takeaway is that raising production alone is insufficient; farmers also need an organized system to collect their produce, connect them with processors, and ensure timely payments. India's dairy growth has been driven by both public and private sector participation. Government initiatives, particularly Operation Flood, strengthened cooperatives, veterinary services, and milk procurement infrastructure, while private dairies invested in processing, cold chains, and distribution. Together, these efforts improved productivity, market access, and farmer incomes, making India the world's largest milk producer.

Kishor Yelati and Gopal Krishna Reddy, among thousands of other farmers, are hoping for a similar outcome.

Key Takeaways

* $18.3 billion | What India spent in 2024-25 on importing 16-17 million tonnes of edible oil -- palm oil being the largest component.

* ₹11,040 crore | The budget allocated to the National Mission on Edible Oils-Oil Palm to build out nurseries, mills, and farmer price cushions.