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Informist, Tuesday, Apr. 15, 2025

 

MUMBAI – The surge in edible oil imports from Nepal is leading to an uneven playing field for Indian processors and refiners, impacting oilseed prices and resulting in under-utilisation of domestic capacity, the Indian Vegetable Oil Producers' Association said on Monday.

 

In a press release, the association raised concerns about duty-free imports from Nepal under the South Asian Free Trade Area framework. Under the free trade agreement, edible oil is allowed to be imported from member countries at zero duty. Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka are members of the free trade regime.

 

Edible oil imports from Nepal have risen sharply to 180,000 tonnes between January and March, up from 125,000 tonnes imported in the entire 2024. Most of the imports in 2024 only arrived in India during Oct-Dec, after the hike in domestic edible oils in September, which prompted re-routed imports of soybean to India through Nepal.

 

"The surge in imports, which is not backed by Nepal's own oilseed production capacity, raises serious questions around the effective enforcement of Rules of Origin and the risk of third-country routing," the association said.

 

With the jump in imports from Nepal, market sentiment around oilseed prices has weakened, resulting in farmers selling their produce below the minimum support price despite the rise in import duties and other corrective measures, the association said. The trend also has broader fiscal implications, including potential loss of revenue and erosion of the intended benefits of duties such as the Agriculture Infrastructure and Development Cess, it said.

 

The association has submitted a proposal to the government, outlining recommendations to ensure provisions of free trade agreements are implemented in both letter and spirit, without adversely impacting India's farmers, processors, or long-term agri-economic interests, the release said. 

 

On Mar. 18, the Central Board of Indirect Taxes and Customs amended the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 in a bid to restrict the import of duty-free edible oil from countries such as Nepal. A key revision replaces the word 'certificate' with 'proof' for commodities imported under concessional duty.  End

 

Reported by Shreya Shetty

Edited by Subhojit Sarkar

 

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