India’s latest push for edible oil self-sufficiency, as outlined in the 2025 Union Budget, risks undermining its environmental goals unless sustainability safeguards are enforced. Under the National Mission on Edible Oils – Oilseeds (NMEO-Oilseeds), the government aims to increase domestic production from 39 million to 70 million tonnes by 2030, covering over 10 lakh hectares through 600 new value chain clusters. The mission supports ESG-aligned objectives by reducing import dependency—currently 55–60%—and boosting rural livelihoods. 

However, experts warn the policy could threaten India’s carbon neutral strategy. Oilseed crops such as soybean, groundnut, and mustard are water- and chemical-intensive, often leading to biodiversity loss, soil depletion, and pollution. Expanding cultivation into ecologically sensitive zones like Meghalaya may drive deforestation and overstrain natural resources. Palm oil, also included in the plan, is especially controversial due to its global links to habitat destruction and high emissions. 

The environmental trade-offs challenge the core ESG principles India aspires to uphold. To align with its carbon neutral strategy, experts recommend climate-smart farming methods such as agroforestry, AI-driven precision irrigation, and region-specific resilient crop varieties. Intercropping oilseeds with fruit trees in Rajasthan and groundnut with coconut in Tamil Nadu can reduce water use and enhance biodiversity. Promoting organic farming and pollinator-friendly practices will further mitigate environmental damage. 

With India investing ₹10,103 crore into the NMEO-Oilseeds programme, policymakers must ensure ESG integration across the supply chain. By adopting sustainable farming practices and protecting fragile ecosystems, India can reduce its edible oil imports without compromising its carbon neutrality targets. Without such foresight, the nation risks trading import reliance for long-term ecological degradation—counteracting both its environmental and food security goals. 

Sources: 

https://www.policycircle.org/opinion/indias-edible-oil-policy/  

https://equinoxlab.com/blog/india-edible-oil-imports-drop-impact-on-businesses-and-the-need-for-testing 

https://economictimes.indiatimes.com/industry/cons-products/food/india-edible-oil-imports-hit-4-year-low-dealers-say/articleshow/118698798.cms?from=mdr