Import of refined edible oil from Nepal at zero duty under SAFTA treaty

18-Sep-2024 07:14 PM

New Delhi. Under the South Asia Free Trade Agreement (SAFTA), the trade of refined soybean oil and palm oil has once again started from the northern neighbouring country Nepal.

After a massive 20 percent increase in import duty on refined edible oils in India, the trend of importers is increasing towards importing edible oil from Nepal at zero duty.

According to industry analysts, there are two aspects to this. The first part is that Nepali traders import it directly from major exporting countries and re-export it to India and the second aspect is that Indian importers import it from abroad in the name of Nepali traders.

Actually, there is no duty on importing edible oil from anywhere in Nepal, so importing there is cheaper and then import of edible oil from Nepal to India remains duty free.

In this way, refined edible oil imported here via Nepal is relatively cheaper and can be easily sold in the domestic market.

But there is a provision in the SAFTA treaty through which the huge import of refined edible oil from Nepal can be controlled. Under this provision, the refined edible oil imported into India must be produced in Nepal, although it is produced there in very limited quantities.

The indigenous refining industry has urged the government to strictly implement this provision and control imports.