Edible Oil Imports Stir Unrest: India-Nepal Trade dynamics under Scrutiny

The Indian Vegetable Oil Producers' Association raises alarms over the spike in duty-free edible oil imports from Nepal, questioning the integrity of trade agreements. This surge threatens domestic markets, affects farm-gate prices, and calls for urgent government intervention to safeguard India's agricultural interests.

The Indian Vegetable Oil Producers' Association (IVPA) has formally appealed to the central government, voicing concerns about a significant rise in duty-free edible oil imports from Nepal under the South Asian Free Trade Area (SAFTA) framework.

Early 2025 saw imports soar to over 1.80 lakh metric tons between January and March, a stark increase from 1.25 lakh tons recorded in the entire year of 2024, according to IVPA. The Association suggests a portion of the previous year's imports flooded India during the last quarter, possibly as a rerouted result of heightened Indian duties.

Expressing skepticism about the enforcement of Rules of Origin, IVPA contends that the increased edible oil exports from Nepal, a nation lacking the necessary oilseed production, indicate third-country rerouting. This scenario jeopardizes fair competition, affects local oilseed prices, and undermines domestic refining capacity, posing significant implications for India's fiscal health and its agricultural economy.

(With inputs from agencies.)