Industry body SEA warns new vegetable oil rules may challenge smaller producers

New Delhi | The government's new vegetable oil regulation marks the sector's biggest overhaul in over a decade but could burden thousands of small producers lacking digital infrastructure, industry body SEA President Sanjeev Asthana said on Wednesday.

The Vegetable Oil Products Production and Availability (Regulation) Amendment Order, 2025, replaces key provisions of the 2011 framework and aligns with the Collection of Statistics Act, 2008, seeking to improve transparency and data accuracy across the value chain.

While larger players may adapt quickly to the new requirements, the Solvent Extractors' Association (SEA) President warned that thousands of small and unorganised producers-many without digital systems-could struggle with mandatory portal-based registration and monthly filing requirements.

"The bigger question is whether the government can identify and onboard all such units," Asthana said in a statement. "Without full coverage, compliance gaps could persist despite tighter rules, defeating the objectives of the Order," he said in a statement.

The amended order mandates monthly reports by the 15th of each month, detailing oil usage, production, and other operational data, raising industry concerns about data confidentiality and technical reliability.

Asthana highlighted practical challenges, including the need for robust safeguards on confidentiality, limits on cross-departmental data use, and portal reliability concerns that could cause inadvertent non-compliance if technical glitches occur near filing deadlines.

The industry body also called for clearer definitions for certain blended or value-added products and a reasonable transition timeline to avoid confusion and market disruption.

"The amendment enhances transparency, facilitates better market intelligence, and supports evidence-based policymaking", according to government statements on the regulation.

Despite implementation concerns, Asthana acknowledged that a well-regulated and documented sector would ultimately improve policy-making and enhance India's global competitiveness in vegetable oils.

"The key will be adapting swiftly while ensuring no producer-large or small-is left behind in the edible oil industry," he said.

The Solvent Extractors' Association of India represents 875 members, including about 350 working solvent extraction plants with a combined processing capacity of about 30 million tonnes annually.