Nepalese processors seek lower sunflower oil duty after India cuts tariffs

Nepalese edible oil producers have urged the government to reduce the import duty on crude sunflower oil following a similar move by India. Businesses fear that cheaper products on the Indian market could increase illegal cross-border supplies and weaken the competitiveness of domestic processors.

India cut the import duty on crude sunflower oil from 16.5% to 5.5% from September 24. Including the 5% GST, the overall tax burden on refined sunflower oil in India is around 11%, making it cheaper than on the Nepalese market.

Nepal currently imposes a 10% import duty and 13% VAT on crude sunflower oil. Industry representatives estimate that sunflower oil in India became around 10 rupees per litre cheaper after the duty cut, widening the price gap between the two countries.

Nepalese processors warn that without changes to customs policy and tighter border controls, domestic companies will find it increasingly difficult to compete with cheaper Indian products. They see the greatest risk in the sunflower oil segment.

India also reduced duties on crude soybean and palm oil from 16.5% to 11.5%. However, the tariff gap in these segments is smaller, so Nepalese businesses do not expect the same level of illegal import risk as in sunflower oil.

Tags: sunflower oil, India, Nepal