In today’s rapidly evolving manufacturing industry, researchers and engineers are constantly seeking innovative methods to improve machining processes. One such area of interest is the use of electrical discharge machining (EDM) for difficult-to-machine metals like SS316. This research compares the performance and economic aspects of traditional EDM and powder-mixed EDM when machining SS316 using copper electrode. Graphite powder dispersed in biodegradable palm oil is investigated as a dielectric media with the aim of enhancing EDM performance. According to the findings, the analysis of the cutting performance of different machinability aspects revealed that using graphite powder mixed with palm oil as a dielectric in EDM outperformed conventional EDM relating to material removal, surface finish, surface hardness, electrode wear rate and hole overcut. The flushing condition and unique properties of graphite powder and palm oil, such as cooling, and thermal conductivity, contributed to the improved performance observed in EDM processes. These findings highlight the potential of graphite powder mixed with palm oil as a promising alternative dielectric in EDM, offering enhanced machining capabilities and improved surface quality. The total machining expenditure per part under PMEDM (INR 505.50) is lowered by 9.2% than expenditure under conventional EDM (INR 525). The surface microhardness of the machined component attained using graphite powder-mixed EDM is enhanced in comparison to that achieved using standard EDM due to the creation of a carbon-rich re-solidified layer.