This oil is produced from rice bran, an oily layer in between the paddy husk and white rice.
"In India, full potential of rice bran oil is not tapped. Current production of rice bran oil is over 9,80,000 tonnes per annum and increasing by about 40,000/50,000 tonnes per annum," Solvent Extractors' Association (SEA) Executive Director B V Mehta said in a paper presented at Bangkok.
India is the world's second largest producer of rice and it is the most important cereal food crop in the country.
However, India is processing only 5 million tonne and the rest is consumed directly as cattle feed.
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"Based on rice bran potential, rice bran oil production potential is over 1.62 million tonnes per annum in India," Mehta said, adding that the untapped potential is nearly 6,50,000 tonnes.
In India, about 44 million hectares are under rice production and average yield is about 2,400 kg/hectare. The country's rice production stood at 110 million tonnes in the 2016-17 crop year (July-June).
Major states producing rice in India are West Bengal, Andhra Pradesh, Uttar Pradesh and Punjab.