In line with the output, the demand for edible oils is also expected to increase to around 29 million tonne in FY22 from around 24 million tonne in FY17, the rating agency added.
This will result in rise in import requirements, which is expected to increase to around 16 million tonne in FY22, from around 14 million tonne in FY17.
ICRA said, the government has been focusing on improving the production of oilseeds in the country through various schemes and which has resulted in reasonable level of success in improving the yields.
However, it added that the increase in production achieved so far is much less than required and is mainly on account of factors like limited availability of quality seeds, inefficient infrastructure setup and low economic incentives for farmers to shift to oilseeds production.
There is an urgent need to improve the seed supply chain to improve the seeds availability and to technical assistance to farmers along with infrastructure development for efficient and smooth functioning of the markets, it said.
Meanwhile, the report said, the well-spread out monsoon in FY17, has helped the industry and the good rains in current year are expected likely to keep the production levels high during FY18.
ICRA expects the seed industry to continue witnessing double digit growth over the medium term largely driven by improving seed replacement ratio and increasing adoption of improved varieties of hybrid seeds.
"Further, we continue to maintain that the sector needs significant increase in investments in research and development (R&D) and infrastructure development for the industry to further build on the growth momentum," ICRA Associate Head and AVP, Corporate Ratings, Sachin Sachdeva said.
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