Edible Oil Imports from Nepal Likely to Decline After Customs Notification

24-Mar-2025 05:52 PM

Edible Oil Imports from Nepal Likely to Decline After Customs Notification


Mumbai – The Customs Department issued a key notification on March 18, mandating importers/exporters to submit a 'Proof of Origin' instead of a 'Certificate of Value Origin' for goods imported under the concessional duty structure.

The Solvent Extractors Association of India (SEA) expects this regulation to curb the import of edible oils from Nepal and other SAARC countries.

Key Issues & Impact on Indian Industry

✅ Heavy Imports from Nepal:

  • Refined soybean oil & palm oil are being imported duty-free under the South Asia Free Trade Area (SAFTA) treaty.

  • These imports violate the Rules of Origin, harming Indian refiners & oilseed producers.

  • Northern & Eastern states are most affected, but cheap Nepalese oil has started reaching Central & Southern India.

✅ Revenue Loss & Industry Threat:

  • India loses customs revenue on these imports.

  • Nepal does not produce soybean or palm oil in significant quantities; it imports these oils and re-exports them to India duty-free.

  • Imported edible oils in other countries are taxed, making India a preferred dumping ground.

✅ Expected Impact of New Rule:

  • Stricter proof of origin requirements may reduce Nepalese oil imports.

  • This could benefit Indian refiners and oilseed farmers.

  • The government may collect more revenue, as concessional duty misuse will be checked.

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