IVPA seeks curbs on duty-free imports of edible oil from Nepal under SAFTA

The Indian Vegetable Oil Producers’ Association (IVPA) on Monday called on the government to take steps against an “unprecedented surge” in duty-free refined edible oil imports from Nepal under the South Asian Free Trade Area (SAFTA) framework.

Imports from Nepal jumped more than 17-fold in two years, rising to over 804,000 tonnes in 2025 from 47,295 tonnes in 2023, the industry body said in a statement, adding that volumes were on track to reach 1 million tonnes annually, making Nepal one of India’s largest suppliers of refined edible oils.

IVPA said the increase marked a significant structural shift in India’s edible oil trade that required policy attention to keep trade, tariff and domestic value-addition goals aligned.

“India has consistently championed regional economic cooperation and remains fully committed to the objectives of the SAFTA Agreement,” IVPA President Sudhakar Desai said, adding that the scale of the duty-free imports called for a policy review to protect the competitiveness of India’s domestic refining industry and support farmers.

The association said the surge could hit refining capacity utilisation, future investment and demand for Indian-grown oilseeds such as soybean and mustard. It is estimated that the shift could cost the government Rs 2,000-2,500 crore a year in customs revenue while shifting value addition outside India.

IVPA has requested the government to verify compliance with SAFTA’s Rules of Origin through the Customs Administration of Rules of Origin under Trade Agreements Rules, 2020 (CAROTAR), citing Nepal’s limited domestic availability of palm oil and soybean. It also sought a review of the existing tariff structure.

“Our representation is not intended to restrict legitimate bilateral trade with Nepal or dilute India’s international commitments,” Desai said, adding that it aimed to ensure preferential tariff benefits go only to products that genuinely qualify under the Rules of Origin.

India is the world’s largest importer of edible oils and relies on imports to meet domestic demand, even as it has sought to encourage domestic refining to keep value addition, investment and jobs within the country.