Strong Surge in Nepal’s Agri-Linked Goods Exports

10-Jun-2025 04:38 PM

Kathmandu. During the first 10 months of the current financial year i.e. from mid-July 2024 to mid-May 2025, a normal increase of 6.74 percent was recorded in the export earnings of high value products from Nepal. This includes yarn, jute and its products, tea and fabrics etc. The export of goods listed under the Trade and Export Promotion Center (TEPC) earned an income of Rs 83.10 billion during this ten-month period. In these 10 months, a total of Rs 217.91 billion worth of products were exported from Nepal, which was 72.71 percent more than the same period of the previous financial year.

In fact, due to the dramatic increase in the export of refined edible oils - soybean oil, sunflower oil and palm oil, there was a tremendous increase in the shipment and revenue of Nepali goods. Although the commercial production of these edible oils in Nepal is negligible, it is imported in large quantities from abroad and re-exported to Indian markets. It is noteworthy that under the South Asia Free Trade Area (SAFTA) agreement, duty-free import of many other items including edible oil from Nepal has been allowed in India, which Nepal is taking full advantage of.

In the ten months from mid-July 2024 to May 2025, 4,30,504 tonnes of refined edible oil worth Rs 90.75 billion was exported from Nepal. In fact, in September 2024, the Government of India increased the basic customs duty on import of edible oils by a huge 20 percentage points, giving Nepal's exporters a golden opportunity to increase exports. Now the Government of India has reduced the basic import duty on crude edible oils from 20 percent to 10 percent, while no change has been made in the import duty on refined edible oils, as a result of which importing refined edible oil from Nepal will no longer prove to be very profitable. This is expected to cause a major blow to Nepal's refiners, while Indian refiners will get some relief.