Ahead of Kharif, Telangana Seeks Higher Palm Oil Tariff and Dedicated Urea Allocation

As Telangana prepares for the upcoming kharif season, the state government has urged the Centre to restore higher import duties on crude palm oil (CPO) and ensure dedicated urea supplies from the Ramagundam Fertilizers and Chemicals Limited (RFCL) , arguing that both measures are critical to protecting farmer incomes and strengthening agricultural security.

The demands were raised by IT and Industries Minister Duddilla Sridhar Babu during a meeting with Union Commerce and Industry Minister Piyush Goyal in New Delhi. Along with seeking policy support for farmers, the minister also pushed for a series of industrial and infrastructure projects under Telangana's Rising Vision 2047 agenda.

A key demand relates to the import duty on crude palm oil. Telangana has sought restoration of the duty to 44% from the current effective rate of around 16.5% , arguing that cheaper imports from Indonesia and Malaysia are affecting domestic growers. The Centre had reduced the basic customs duty on crude palm oil from 20% to 10% in 2025 as part of efforts to contain edible oil prices and food inflation.

The state believes the move has put pressure on domestic prices at a time when thousands of farmers have invested in oil palm cultivation under the National Mission on Edible Oils–Oil Palm (NMEO-OP) . Oil palm is a long-gestation crop that typically takes three to four years to begin commercial production, making stable prices crucial for farmer returns.

The issue carries particular significance for Telangana, which has emerged as one of India's leading oil palm-producing states. With nearly 2.82 lakh acres under cultivation, the state accounts for roughly one-fourth of India's oil palm acreage and is considered the country's second-largest oil palm producer after Andhra Pradesh. Telangana has also been expanding cultivation aggressively to support India's goal of reducing dependence on imported edible oils.

Oil palm cultivation in the state is concentrated in Khammam, Bhadradri Kothagudem, Nalgonda and Suryapet districts. Areas such as Aswaraopeta, Dammapeta, Sathupalli, Chandrugonda, Palvoncha and Bhadrachalam have emerged as major cultivation clusters, with thousands of farmers shifting from traditional crops to oil palm in recent years.

Alongside the tariff demand, Telangana has sought exclusive allocation of urea produced at the RFCL plant in Ramagundam . The state cited supply disruptions during previous agricultural seasons and argued that dedicated access to locally produced fertiliser would ensure timely availability during peak demand periods. Officials say such an arrangement would reduce transportation delays, improve distribution efficiency and strengthen farm preparedness during the kharif season.

Beyond agriculture, Sridhar Babu sought central support for a logistics hub at Zaheerabad Industrial Smart City , where the Hyundai Group has committed ₹8,500 crore to establish a Global Innovation and R&D Centre. He also informed the Union minister that Telangana is preparing Detailed Project Reports for 15-20 plug-and-play industrial parks under Phase-I of the Bhavya scheme and requested approvals during the June-July application window.

The minister further pitched an Aero-Defence Corridor , two mega leather parks under the Mega Leather, Footwear and Accessories Cluster Development (MLFACD) scheme, and central clearance for the ₹2,050-crore Multi-Modal Logistics Park at Manoharabad in Medak district, being developed in partnership with National Highways Logistics Management Limited (NHLML) .

The twin demands on palm oil and fertilisers underscore Telangana's efforts to balance farmer welfare, agricultural self-reliance and industrial expansion , while reinforcing its growing role in India's edible oil security strategy and manufacturing ambitions.