Palm oil in India
Approximately 95% of the palm oil in India is used as edible oil for domestic and commercial consumption. Oils and fats in India are mostly sold by independent small grocers. A small quantity is also used as a raw material for consumer goods such as soap bars, cosmetics, detergents and shampoos.
As in China, government policies play a key part in the palm oil market. For all vegetable oils, domestic import tariff policies drive consumption patterns. In 2008, most duties on crude vegetable oil (including palm oil) were abolished, in response to growing domestic food inflation, opening the Indian market to palm oil imports.
Few companies in India have started to take action on certified palm oil. The main reason is the price sensitivity of the Indian market, which makes companies reluctant to pay even a small premium for sustainable commodities. Furthermore, palm oil is mainly used as edible oil in India, most of it sold loosely and for blending.
This makes it difficult to identify the end user who can be influenced to use sustainable palm oil and palm oil products. As with China, WWF believes that it is still too early to score Indian companies on their commitments and actions on sustainable palm oil. Nevertheless, they are making some progress.
As of 2011, four companies in India are registered as members of the RSPO—Adani Wilmar, Godrej, Kamani Oil Industries and VVF. Meanwhile, some Indian stakeholders have formed the “Sustainable Palm Oil Coalition”, a domestic palm oil coalition which has so far focused on lobbying the government to support sustainable palm oil purchases.
Led by Godrej, Greenpeace, Hindustan Unilever, Ruchi, VVF and WWF-India, the group aims to kick-start the uptake of certified sustainable palm oil through a proposal that the government extend a customs duty rebate for all palm oil products, including palm by-products and palm derivatives, which are backed by RSPO certificates.
Alternatively, the government may extend a subsidy to the importers, up to 50-75% of the cost of RSPO certificates. In addition to incentives that the Indian government might provide, WWF sees a role for large companies operating in India to lead the way on procuring sustainable palm oil, particularly those affiliated with multinational companies that have already made time-bound global commitments to certified sustainable palm oil.