December 4: Nepal's oil industry has been affected by India's policy, which aims to provide relief to its consumers. Due to India’s policy, oil export from Nepal has been reduced to a quarter.
India has reduced the customs duty on the import of cooking oil to keep the market price under control. Currently, India is charging customs duty of zero to 2.5 per cent. Earlier, the customs duty on import of edible oil was 40 percent. Nepali industrialists took advantage of this difference. But now, India imports oil from other countries at a cheaper price compared to Nepal.
Stakeholders shared that after the decline in oil exports, which is one of the main contributors to the government’s revenue, the country’s foreign trade will record deficits.
Entrepreneur Suresh Rungta said that Nepal's industries had been exporting oil by paying up to 5 per cent duty under the SAFTA concession. But now India has started importing oil at zero percent customs duty and therefore the concession has become ineffective.
According to the data of the Birgunj customs office, which is the main point for cooking oil export, the export of refined palm oil has decreased by 69 per cent compared to the first quarter of the last fiscal year.
Dhan Bahadur Baruwal, chief customs officer of Birgunj Customs Office, said that 7.6 million liters of palm oil worth Rs 13.5 billion were exported in the first four months of last year and has declined to Rs 4.9 billion during the same period this year.
In the first four months of the current year, 1.13 million kiloliters of soybean oil worth 3.2 billion rupees have been exported. This export value is 82 percent lower compared to last year.
Soybean oil worth more than Rs 17.20 billion was exported between mid-July to mid-November last year. The export of sunflower oil also seems to have decreased by 79 per cent.
In the first four months of the current fiscal year, 172,000 liters of sunflower oil worth Rs 32.8 million have been exported through Birgunj Customs. Last year, 76,000 liters of sunflower oil worth Rs 155.1 million were exported in the same period.
The data of the customs show that after the export of oil decreased, the import of its raw materials also decreased. From mid-July to mid-November of the current fiscal year, 42.9 million liters of raw palm oil were imported through the Birgunj customs. This is 61 percent less than the same period of last year. According to customs data, raw soybean oil import has decreased by 54 per cent to 53.8 million liters.