New Delhi: India is increasingly turning to China for edible oil imports due to pricing advantages, a shift that could reshape sourcing patterns and ease cost pressures amid spiralling retail prices, according to three industry experts tracking the trend. India’s retail prices of key edible oils have risen 10-15% in recent weeks.
India, world’s largest edible oil importer, traditionally imports palm oil from Indonesia and Malaysia, and sunflower and soybean oil from Ukraine, Russia, Argentina and Brazil. The pivot towards neighbouring China could be particularly important, as the ongoing West Asia war has and spiked freight and insurance costs.
India’s annual edible oil demand is around 26 million tonnes (mt), with domestic production meeting only up to 40% of this.
According to latest trade data, India imported 14,963 tonnes of palm oil and 175,502 tonnes crude soybean oil from China between November 2025 and February 2026, as against a total of 36,000 tonnes of edible oils in the entire year ended October 2025.
This is still a modest figure, given India’s total edible oil imports of around 16 mt. However, the sharp rise in shipments shows a growing willingness among importers to explore non-traditional sources amid tightening global supply conditions.
Industry experts see Chinese edible oil imports rising further, as competitive pricing and lower logistics costs will give them an edge over the country’s traditional exporters.
According to traders, on an average, retail prices have risen by ₹15-20 per litre across including soybean, rice-bran, cottonseed, palm, groundnut and sunflower over the past one month. For instance, the price of rice-bran oil has risen from ₹115 to ₹135 per litre, while sunflower oil is up from ₹140 to ₹160 a litre.
This price rise has led to concern within the government regarding food inflation and the strain on household budgets. Apart from household use, edible oil is also a key input in several categories of the fast moving consumer goods (FMCG) industry, including food items, cosmetics, soaps, etc.
In recent years, China has become a notable global supplier of soybean oil, frequently generating a surplus of the commodity as it is co-produced with oil meal during soybean crushing.
“This surplus has led to a highly competitive free-on-board (FOB) price of $1,100 per tonne from China,” said Pushan Sharma, director at Crisil Intelligence. “In contrast, Argentina and Brazil offered prices ranging from $1,160 to $1,170 per tonne in January 2026. Furthermore, the logistics costs associated with importing edible oil from China are lower compared to those from Argentina and Brazil. Taking advantage of this cost differential, India has started importing substantial quantities of soybean oil from China.”
According to Sharma, if the US-Iran war continues, China’s share in India’s soybean oil imports could soon rise from current 13% to as much as 20%. “As market dynamics evolve, India’s soybean oil import landscape may shift towards China, driven by cost competitiveness and geopolitical considerations,” he added.
Economists see China’s price advantage as the biggest lure for India’s importers.
China has an exportable surplus of soybean oil, and its proximity to India, compared with Argentina, offers a freight advantage that allows about $20-30 per tonne of discount for the Chinese cargoes, said Shweta Saini, agriculture economist and founder-chief executive officer (CEO) of Delhi-based Arcus Policy Research.
“At the same time, soybean oil futures on the global benchmark CBOT (Chicago Board of Trade) have risen about 22%, driven by stronger demand from biodiesel as crude oil prices have increases amid the US-Israel war with Iran,” Saini said, adding that freight rates have also climbed and the rupee has weakened.
“India needs to explore diversification of sourcing edible oil to ensure supply stability. However, it is important that it should be viable. This year, we imported crude soybean oil from China as it was viable,” said B. V. Mehta, executive director of the Solvent Extractors Association (SEA), representing nearly 900 Indian companies.
The move signals a gradual shift in India’s edible oils’ import strategy amid its quest to secure supply and rise in prices. “We have noticed an increase in retail prices of edible oils, but there is no need for concern. We have sufficient stocks and are in the process of sourcing edible oils from alternative markets to keep retail prices under control. Prices will stabilize in the coming days,” said a government official requesting anonymity.
Queries emailed to the consumer affairs as well as the commerce ministries and the Chinese embassy in New Delhi remained unanswered until press time.
Industry executives said the decision to source crude soybean oil from China was driven purely by the price factor. “Since the outbreak (of the West Asia war), retail edible oil prices have climbed by nearly 10%. Wholesale prices have also increased and margins have narrowed.” said A. R. Sharma, chairman, Ricela Group, manufacturer and exporter of refined rice bran oil.