InfoSAWIT, JAKARTA – Fadhil Hasan, Senior Economist at the Institute for Development of Economics and Finance (INDEF), has identified five critical issues shaping palm oil trade relations between Indonesia and India.

First, he pointed to a declining trend in India’s palm oil imports from Indonesia since 2024. Data show that exports to India fell by 28% in the January–June 2025 period compared with the same period a year earlier. The main factor, according to Fadhil, was the temporary price premium of palm oil over other vegetable oils, prompting Indian buyers to switch to alternative sources.

The second issue concerns Indonesia’s mandatory biodiesel program. The expansion of the blending mandate to B40 has raised concerns over export supply availability, including for India. Government plans to move toward B50 or higher in the coming years will be a key factor in maintaining global market balance.

Third, India’s long-term ambition to achieve vegetable oil self-sufficiency within the next two decades could potentially reduce import volumes. However, Fadhil sees opportunities for collaboration, particularly in seed technology and agricultural expertise from Indonesia.

Fourth, he highlighted the inconsistency of India’s import tariff policies. Frequent and sometimes abrupt changes create uncertainty for Indonesian exporters. Strengthened bilateral dialogue and sustained promotional campaigns in India are therefore necessary to improve trade predictability.

Finally, market perception remains a challenge. Palm oil is often viewed as inferior to other vegetable oils, especially among middle- and upper-income consumers. Yet Fadhil argues that palm oil has competitive advantages in terms of nutrition and efficiency.

“Indonesia–India palm oil trade relations must move beyond traditional transactions. They should expand into research cooperation, investment partnerships, and joint campaigns to ensure long-term market sustainability,” Fadhil said. (T2)

Source: InfoSAWIT Magazine December 2025 Edition