India Keeps Eye on Indonesia’s Tight State Control over Palm Oil Exports
India has said it is closely monitoring Indonesia’s new state-controlled palm oil export regime, stressing that its food security depends on stable Indonesian palm oil supplies. New Delhi hopes the transition will not disrupt trade, as India imports about 60% of its edible oil requirements, much of it from Indonesia.
An Indian diplomat admitted Friday that his country’s food security relies on Indonesia’s palm oil, as New Delhi intends to keep a close watch over Jakarta’s new trade regime to prevent it from disrupting supplies.
President Prabowo Subianto’s decision to have a single state-run agency oversee the entire palm oil export has kept everyone on their toes. Countries across the globe are largely dependent on Indonesian palm oil, meaning that shifts in export controls are expected to affect commodity flows. Officials from some palm oil-importing nations have revealed their countries’ stance on Jakarta’s trade shake-up, the latest being Indian Ambassador Sandeep Chakravorty.
“We are one of the largest purchasers of palm oil. I believe [the export centralization] is still a work in progress. We don’t have certainty on how those exports will be centralized, but we will watch out for the developments,” Chakravorty told a news conference in Jakarta.
“At the moment, we don’t have concerns that are out of the ordinary. We will be watching the space.”
The envoy went on to say how India’s food and energy security is “dependent on Indonesia”.
He added: “We would not like anything to happen which will upset that. Having said that, we are very open to what is happening.”
India is fully aware of the government’s rationale behind the new policy, according to Chakravorty, alluding to Prabowo’s strategy that this new system will curb state revenue loss that accumulated from three decades of rampant under-invoicing.
“We understand the reasons. We believe that we are part of the solution,” Chakravorty said.
This one-gate export system is currently in a transition period before its full implementation early next year. By then, all exporters must not only report to the Danantara Sumberdaya Indonesia (DSI), but also have the nascent state-owned agency take care of the shipments and transactions with the foreign buyers. DSI’s task is currently limited to cross-checking the export documents of businesses to prevent businesses from under-reporting the shipment volumes.
Official statistics showed Indonesia-India trade totaled almost $23.2 billion in 2025. Indonesia’s $18.3 billion in exports sent its surplus to nearly $13.5 billion that year. Exports of goods in the “vegetable oil/animal fat” category amounted to roughly $3.6 billion. Palm oil is in this category. India imports approximately 60% of the edible oil it consumes.
In comments to this export shake-up, officials from other palm oil importers such as Egypt and Singapore are hoping for stability of trade flows. Indonesia is the world’s largest supplier of the edible oil commonly found in packaged goods and personal care items.
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Source : JakartaGlobe.ID
