India's recent reduction in customs duties on processed edible oil imports has increased the risk that Nepali producers will lose some of their competitive advantage in the Indian market. The change is expected to put pressure on industry profits and market share before affecting export volumes, according to reports from Kathmandu.
Nepal exported more than Rs 146 billion worth of soybean, palm and sunflower oil to India in the last fiscal year, making the Indian market important for the country's edible oil industry.
How India's tariff change could affect Nepal
The revised Indian tariff structure could make it harder for Nepali oil exporters to compete with other suppliers of processed edible oil. The immediate pressure is expected to fall on exporters' margins and market share, while any effect on the volume of exports may come later.
Nepal's edible oil exports to India
- Nepal exported soybean, palm and sunflower oil to India.
- The value of those exports exceeded Rs 146 billion in the last fiscal year.
- India's customs duty reduction on processed edible oil imports raises concerns over Nepal's competitiveness.
