August 7: Palm oil was on top of the list of products exported to India in the last fiscal year although Nepal does not produce palm oil itself. The export of soybean oil also increased significantly last year.
The country imported palm oil worth Rs 11.86 billion in the fiscal year 2018/19 while it exported the refined palm oil worth Rs 10.33 billion to India during the review period.
Similarly, Nepal imported crude soybean oil worth Rs 13.43 billion in FY 2018/19 and exported refined soybean oil worth Rs 2.34 billion to India.
The sudden increase in import and export of these two products has been attributed to the increase in customs duty imposed by India, say government officials.
India, which is one of the largest importers of palm oil in the world, had increased customs duty on crude palm oil imported from Association of Southeast Asian Nations (ASEAN) by $5 and refined palm oil by $9.
This has directly benefitted the local businessmen of Nepal where there is lower customs duty for import of palm oil. The businessmen have been benefitting from the tariff difference imposed by India.
Nepali businessmen import crude palm oil from Indonesia, Malaysia, Brazil, Ukraine, Thailand and Argentina and export refined palm oil to India.
“Nepali exporters have been benefitting from the low customs duty for agricultural product that the Indian government has given to Nepal,” said Anand Bagaria, a local businessman.
“If this provision is misused, Nepal will be deprived of this facility which the country has been enjoying so far,” he added.