Surge in Soyabean Oil Imports from Nepal to India

India's soybean oil imports are a key factor in its edible oil market. Fluctuations in global prices, domestic production, and government policies significantly impact import volumes, influencing food prices and the overall agricultural economy.

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Context: Imports from Nepal surged by 14 times during the April-November 2024 period compared to the same period in the previous year.

About India’s Soyabean Oil Imports

India’s total soyabean oil imports increased by 19% during the April-November 2024 period, reaching nearly $3 billion, up from $2.5 billion in 2023.
Imports from Brazil (a major soyabean oil producer) declined during the same period, dropping to $549 million from $849.19 million the previous year.

Duty Revision and Impact on Soyabean Oil Imports

India raised the basic customs duty on refined oils like palm oil, soya oil and sunflower oil by 20% in September 2024 to protect Indian oilseed farmers.
This increase in duty led to a significant surge in soyabean oil imports from Nepal in November 2024, which increased to $23.46 million, compared to $1.42 million in November 2023.
A report from the International Food Policy Research Institute (IFPRI) noted that Nepal’s lower tariffs on edible oils (compared to India) allow it to refine and re-export the oil to India at a lower cost.

Tariff Advantage for Nepal

Nepal enjoys a 30% tariff advantage due to zero-duty access for its products into India under the Nepal-India Treaty of Trade (2009).
- Under the Nepal-India Treaty of Trade, Nepal enjoys duty-free access to Indian markets for most of its goods, except for certain items like cigarettes, alcohol and cosmetics.
Nepal’s increased soyabean oil exports to India have raised concerns over the potential misuse of trade advantages under the Nepal-India Treaty of Trade.

Soybean

It is a leguminous crop known for its high protein and oil content.
It is a major source of edible oil, protein-rich animal feed and industrial products like biodiesel.
Growing Conditions:
- It is a kharif crop & grows well in fertile, well-drained loamy soil.
- It requires an optimal temperature of 20°C to 30°C during the growing season.
Top 3 Soyabean producing states of India: Madhya Pradesh, Maharashtra & Rajasthan.
Top Soyabean producing countries: Brazil, USA, Argentina, China & India.