Indian vegetable oil producers call for review of duty-free edible oil imports from Nepal

The Indian Vegetable Oil Producers’ Association (IVPA) has urged the government to conduct an urgent review of the policy governing duty-free imports of refined edible oils from Nepal under the South Asian Free Trade Area (SAFTA). The association says the rapid increase in imports could undermine India’s domestic refining industry.

According to IVPA, imports of refined edible oils from Nepal increased from 47,295 tons in 2023 to 124,000 tons in 2024 before surging to more than 804,000 tons in 2025. If the current trend continues, annual imports could approach 1 mln tons, making Nepal one of India’s largest suppliers of refined edible oils.

IVPA President Sudhakar Desai said India remains committed to regional economic cooperation, but the scale of duty-free imports now warrants a policy review. He noted that refining activity is increasingly shifting outside India, while domestic refiners continue to import crude vegetable oils subject to customs duties and other levies. This, he said, reduces refinery utilization, discourages investment, and weakens demand for domestically produced oilseeds such as soybean and rapeseed.

The association also estimates that duty-free imports of refined edible oils could reduce India’s annual customs revenue by ₹20-25 billion. According to IVPA, the current trade pattern shifts value addition and industrial activity outside the country, weakening the competitiveness of India’s refining sector.

IVPA has called on the government to verify compliance with the SAFTA Rules of Origin through stronger implementation of the CAROTAR framework. The association argues that Nepal has limited domestic supplies of palm and soybean oils, making stricter verification necessary to ensure that preferential tariff benefits are granted only to products that genuinely meet origin requirements. It also called for a review of the current tariff structure to strengthen India’s domestic refining industry and support the country’s long-term edible oil security.

Tags: India, imports, edible oils, Nepal