Yet this rise is only half the story. Beneath the momentum lie structural constraints—fragmented production, aflatoxin risks, and overwhelming dependence on a single market—that threaten to cap future growth if left unaddressed. At the same time, new possibilities are rapidly emerging: high-oleic varieties, premium positioning, traceability technologies, and the untapped potential to build a narrative around health, heritage, and culinary versatility.

India’s groundnut oil sector stands today at a rare crossroads—a moment where agricultural strength, export performance, and strategic vision converge. The question now is whether India can turn its natural advantages into a long-term global opportunity, transforming a traditional oilseed into a premium, value-driven export powerhouse.

Global imports of crude groundnut oil have shown robust growth over the past six years — from US$ 366.1 million in 2019 to a peak of US$ 749.1 million in 2021 and around US$ 622.4 million in 2024 — representing a CAGR of about 11.2%. This momentum is being supported by post-pandemic recovery in consumption, investments in oilseed processing capacity, and emerging demand in markets where price or supply pressures in major oils like palm and soybean are prompting importers to explore alternative oils.

Key factors driving this growth include rising urbanization in Asia and Africa, where groundnut oil is valued for its high-heat stability in frying and its culinary versatility. Volatility persists, however: the 2022 dip to US$ 657.3 million was influenced by drought-related supply disruptions in major producers like Argentina and China. By 2024, imports moderated slightly due to higher freight costs and increased competition from cheaper alternatives such as sunflower oil.

India’s strengths in groundnut oil production

India ranks as the world’s second-largest producer of groundnuts after China, with output reaching 119 lakh tonnes in 2024–25—a remarkable 78% increase from 67 lakh tonnes in 2015–16. This growth reflects significant advances in both cultivation practices and policy support. The area under groundnut cultivation expanded from 46 lakh hectares to 58 lakh hectares, while average yields improved from 1,465 kg/ha to 2,067 kg/ha (source: RBI). These gains have been driven by the adoption of high-yielding seed varieties, improved irrigation infrastructure, and assured price incentives under the National Food Security Mission–Oilseeds (NFSM-OS).

The crop’s production base spans several states, including Gujarat, Andhra Pradesh, Tamil Nadu, Karnataka, Maharashtra, Rajasthan, Madhya Pradesh, Odisha, and Uttar Pradesh. Among them, Gujarat remains the undisputed leader, driven by the sandy loam soils of the Saurashtra region and the advantage of dual kharif-rabi cropping cycles. Southern states such as Tamil Nadu and Karnataka also play a vital role, particularly through highly productive irrigated rabi cultivation.

Together, these regional strengths reflect India’s growing command over the global groundnut value chain—where scientific innovation, resilient farming systems, and farmer-centric policy support have transformed a traditional oilseed into a powerful engine of agricultural growth.

Main markets for groundnut oil

The import landscape is highly concentrated, with a few nations accounting for the bulk of global demand. The pie chart shows that China dominates with a 70.1% share in 2024, primarily importing for domestic refining and export reprocessing.

As the world’s most populous nation, China’s growing demand for affordable edible oils aligns with its groundnut consumption exceeding 2 million tonnes annually. The United States follows with 11.1%, driven by demand from the snack food and health-oriented product segments, while Italy holds 7.7%, supported by its Mediterranean cuisine and cosmetic industries.

Other importers such as the Netherlands, France, Switzerland, Malaysia, Belgium, Hong Kong, and Vietnam collectively contribute to the remaining 11.1%, reflecting Europe’s refining capacity and Asia’s consumption strength.

Data also reveals a very pertinent statistic – crude groundnut oil dominates imports at US$ 622.4 million, compared to US$ 112 million for refined. Industry experts feel that most major consuming countries prefer to refine domestically, capturing value addition, employment, and industrial margins within their own economies.

Crude oils are cheaper to import, attract lower import duties, and give refiners full control over the final product’s quality, aroma, colour, and blending profile—critical in markets such as China, the EU, and ASEAN where refiners customise oils for retail, food processing, and HoReCa requirements.

Many countries deliberately maintain a tariff inversion structure, where crude oil faces low duties but refined oil faces significantly higher duties to protect domestic refining industries; this makes refined oil imports economically unattractive. Moreover, refined oils have a smaller internationally traded volumebecause they are typically produced close to consumption centres, while crude oil is the commodity that moves in bulk across borders.

Logistically, transporting crude oil in large flexi-tanks or bulk vessels is cheaper, and refining closer to end markets reduces risks of degradation and ensures compliance with local standards. Together, these factors make crude oils the globally traded workhorse, while refined oils remain a niche import primarily used when domestic refining capacity is insufficient or when special grades are required.

India’s export dominance and growth trajectory

India’s ascent in crude groundnut oil exports is nothing short of transformative. As graph depicts, exports ballooned from a modest US$ 20.1 million in 2019 to US$ 344.4 million in 2024, achieving a CAGR of 76.7% and a global market share of 62.5%. This exponential growthpositions India as the undisputed rank-one exporter.

Several enablers underpin this success. Gujarat and Andhra Pradesh—India’s leading groundnut-producing states—benefited from initiatives under the National Food Security Mission and other oilseed development programs, which improved yields and strengthened supply chains. Export facilitation measures such as RoDTEP rebates, quality-certification systems, and improved port logistics have further supported India’s growing crude groundnut oil shipments.

India’s crude groundnut oil export trend is highly China-centric, with the country emerging as the primary and near-exclusive buyer in recent years. Although exports briefly declined in 2022 due to domestic edible-oil shortages and policy uncertainty, they rebounded sharply by 2024 as Chinese demand surged and India’s crushing and export capacity expanded.

This rapid recovery has strengthened India’s presence in the global groundnut oil trade, even though the market remains heavily concentrated and strategically dependent on a single destination.

India’s crude groundnut oil exports to China are significant, reflecting both opportunity and risk. Clearly, there is a need for diversification and exploration of new markets.

In terms of usage, imported crude groundnut oil is typically refined within China’s well-developed edible oils industry, turning raw oil into refined cooking oil, blended vegetable oils, and value-added food-processing inputs. China’s edible oil processing sector explicitly lists peanut oil among its products.

The finished products then serve domestic demand for high-heat cooking, frying, snack production and also feed into downstream food manufacturing or even re-export channels.

Beyond India, other players contribute distinct roles in the global market. Brazil, after peaking in 2022 following bumper harvests, now faces sustainability concerns linked to deforestation. These global trade dynamics align with Grand View Research’s outlook, which projects India’s domestic groundnut oil production to grow at a 5.1% CAGR through 2030, reinforcing the country’s rising influence in this segment.

Challenges and future outlook

Despite strong momentum, the crude groundnut oil trade faces several structural and environmental challenges. Climate change remains a pressing concern, with erratic monsoon patterns affecting yields in key producing regions. Additionally, aflatoxin contamination persists as a major barrier, leading to stricter international regulations and quality control measures.

Looking ahead, the outlook remains positive. Innovations such as high-oleic groundnut varieties can enhance India’s value-added export potential, while blockchain-based traceability systems are set to improve transparency and strengthen consumer trust across supply chains. Moreover, sustainability certifications will be vital for accessing environmentally conscious markets and ensuring long-term competitiveness.

In line with this vision, the Government of India is prioritizing efforts to boost oilseed production under the Atmanirbhar Bharat initiative. Collaborative research and development with institutions like the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) will further help enhance productivity, resilience, and sustainability in groundnut cultivation.

As our analysis indicates, refining capacity may not be the route to go for export expansion, as crude remains the dominant import. The key to exports would obviously be to effectively compete with other popular edible oils like sunflower and palm.

But groundnut oil occupies a much smaller place in international trade because of its limited and fragmented global production, higher cost, and primarily food-crop orientation. Unlike palm and sunflower, which are grown at industrial scale specifically for oil extraction, groundnut is largely consumed as a food crop—leaving relatively little surplus available for crushing and export. Its oil yields are lower, production is vulnerable to aflatoxin contamination, and cultivation is concentrated in a few regions such as India, China, and West Africa, restricting stable exportable volumes.

Moreover, groundnut oil commands a premium price, making it less attractive for global food processors who prefer cheaper, high-volume oils like palm or sunflower for frying and formulation. These structural constraints—small supply base, quality risks, and lack of large exporting blocs—prevent groundnut oil from achieving the widespread international penetration that sunflower and palm enjoy.

This brings us to consider another extreme – olive oil, which has a similar challenge in terms of production. However, olive oil has successfully achieved a global premium positioning due to centuries-old Mediterranean heritage, strong geographic branding (like “Extra Virgin Olive Oil,” PDO/PGI regions such as Tuscany and Kalamata), and deep cultural association with health, lifestyle, and gourmet cuisine. Its premium value is reinforced by scientific research on the Mediterranean diet and targeted marketing by major producing countries such as Spain, Italy, and Greece.

Groundnut oil, by contrast, lacks such territorial identity, unified branding, or global culinary symbolism. It is used primarily in Asian and West African cuisines, carries aflatoxin-related quality perceptions, and competes directly with cheaper mainstream oils rather than occupying a distinct lifestyle or culinary niche.

If we even begin to entertain the idea of positioning groundnut oil in a more premium space, it must start with identifying authentic strengths of the oil itself—and there are a few that are genuinely compelling. Groundnut oil has a high smoke point, making it ideal for deep-frying and high-heat cooking, which matters more than ever in a world shifting toward healthier culinary practices.

It is naturally rich in monounsaturated fats (MUFA)—the same “good fats” that give olive oil its heart-health halo—along with vitamin E and antioxidant compounds that support metabolic and skin health. Its neutral-to-nutty flavour also works across cuisines, from Asian stir-fries to bakery applications, giving it a versatility premium oils usually struggle with. And unlike olive oil, which is geographically concentrated, groundnut oil has a strong heritage in India, China, Southeast Asia, and West Africa, giving it multiple cultural narratives to build upon.

So while groundnut oil has never been marketed with the sophistication of olive oil, the raw ingredients for a differentiated, value-added positioning do exist—if the industry chooses to develop them as part of a long-term strategy to boost exports.

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FAQ:

1. Why is India’s groundnut oil trade gaining global attention?
India has transformed from a traditional producer into the world’s No. 1 exporter of crude groundnut oil, commanding over 62% of global market share through improved yields, expanded crushing capacity, and strong export facilitation measures.

2. What factors have driven India’s rise in groundnut oil exports?
Key enablers include adoption of high-yielding seed varieties, better irrigation, government support under the National Food Security Mission–Oilseeds, and port logistics improvements that have enhanced export efficiency.

3. Which are India’s major groundnut-producing states?
Gujarat leads the pack, followed by Andhra Pradesh, Tamil Nadu, Karnataka, Maharashtra, Rajasthan, and Madhya Pradesh—states that collectively drive India’s strong supply base and export capacity.

4. Who are the top importers of crude groundnut oil globally?
China dominates with a 70.1% share, followed by the United States (11.1%) and Italy (7.7%), while countries like the Netherlands, France, Malaysia, and Vietnam make up the rest of the demand.

5. Why does India mainly export crude rather than refined groundnut oil?
Most importing countries prefer refining domestically to retain value addition, employment, and quality control. Crude oil also attracts lower import duties and is cheaper to transport in bulk.