PM Modi's 'Mann Ki Baat' Call To Cut Edible Oil Intake A Timely Intervention

The advisory was more than a dietary one. It's meant to be a strategic, economic, and public health intervention, aimed at correcting a trajectory that is marked by trade imbalances, an increase in national disease burden, and rising negative externalities associated with obesity.

Confluence Of Health & Economics Nexus

India’s rising burden of non-communicable diseases (NCDs) — fuelled by dietary excesses — has now become a systemic threat to productivity and health infrastructure. With obesity rates doubling in the past decade, the per capita oil intake at 19.3 kg per year (60 per cent above ICMR’s guideline of 12 kg) is straining the healthcare system and workforce alike.

Excess edible oil consumption has led to rising NCDs, which have associated negative externalities and impose hidden costs through increased insurance payouts, absenteeism, and lost GDP from reduced productivity. 

A 2014 report by the World Economic Forum and Harvard School of Public Health projects a US$ 4.58 trillion drag on India’s economy by 2030 due to NCDs and mental health disorders.

In this context, a modest 10 per cent reduction in edible oil intake offers a substantial public health dividend, curbing demand-side pressures on health infrastructure, while improving the nation's long-term human capital formation.

India consumed 27.8 million tonnes of edible oil in 2023-24, of which approximately 56 per cent — worth over Rs 1 lakh crore — was met through imports. This is not only a drag on the foreign exchange, but also exposes India to global commodity price volatility, particularly associated with edible oils.

Simultaneously, import parity pricing distorts domestic incentives, suppressing farm gate prices and crowding out local producers.

Here is how it works: Import parity price is the price a domestic buyer would have to pay for a product if they were to import it directly from another country, calculated on the international price, plus costs like transportation, insurance, and tariffs. Farm gate price is the price farmers receive for their produce before costs like transportation, storage, and marketing are added. If the import parity price is lower than the farm gate price, domestic cultivation is disincentivised.

Despite significant productivity gains (44 per cent growth in output since 2014-15), India’s oilseed economy remains stunted due to adverse terms of trade for domestic oilseed farmers.

Reducing per capita demand by even 10 per cent could induce a positive demand elasticity shock, lowering import volumes, easing forex outflows, and stabilising domestic markets, thereby providing a boost to the domestic edible oil sector in general, and oilseed farmers in particular. 

Leveraging Consumer Behaviour for Fiscal Prudence

Beyond awareness, related to excess edible oil consumption, behavioural change towards rationalising edible oil consumption also requires innovative strategies to nudge food choices — via visual oil content labelling, mandatory disclosures in restaurants, and tax incentives for low-oil food formulations.

School-based nutrition education and culturally tailored community interventions can instil habits aligned with both health and economic prudence.

A reconfiguration of price signals through differentiated GST rates for healthier oil blends, for instance, can further calibrate consumption behaviour, aligning it with long-term national priorities.

Rational Trade, Procurement Policies As Stabilisers

Though well-intentioned, the low tariff for edible oil imports that were introduced in 2021 created price distortions that undermined domestic competitiveness. Going forward, a dynamic tariff calibration mechanism, linked to international price benchmarks, can shield Indian farmers from predatory pricing and protect domestic processors.

Meanwhile, fiscal space freed up through import reduction should be reinvested in oilseed R&D, infrastructure, and quality assurance systems. These investments represent not merely subsidies, but also high-yield public goods that catalyse long-term growth and stability.

A Holistic Framework For Atmanirbharta

The PM’s call for a 10 per cent consumption cut is more than a public campaign — it is an inflection point. It reflects a necessary convergence of public health policy, trade economics, and agri-sector reform under the broader canopy of Atmanirbhar Bharat.

The resultant benefits — a healthier population, lower fiscal and trade deficits, and more robust rural incomes — represent multi-sectoral positive externalities that compound over time.

By institutionalising demand moderation, India can insulate itself from future commodity shocks, mitigate healthcare costs, and reclaim its edible oil narrative from one of dependency to one of resilience.

(Kishan is a Joint Secretary in the Department of Agriculture & Farmers Welfare, GoI, looking after the Oilseeds and Marketing Division. Kant is an Additional Economic Advisor in the same department. Views are personal)