India’s high export duties on oils have allowed Nepal to earn from re-exports
Nepal’s total exports grew by 72.71% in the first ten months of the current fiscal year (mid-July 2024 to mid-May 2025), mainly due to a sharp increase in re-exports of refined edible oils such as soybean, sunflower and palm. According to the Trade and Export Promotion Centre and the Department of Customs, these oils earned Rs 90.75 billion for 430,504 tonnes.
The main driver of the growth was India’s hike in duties on crude edible oils to 20%, making Nepal’s refined oils competitive in the Indian market under the South Asian Free Trade Area (SAFTA). This has allowed Nepal, which does not produce these oils commercially, to earn from re-exports.
However, India’s recent reduction in duties on crude edible oils to 10% on May 30 could slow this export boom. Experts warn that the reliance on re-exports of oils makes Nepal’s economy vulnerable to changes in India’s customs policies.
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