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Nepal Soyoil Surge Overwhelms Indian Market
25 Feb
Summary
- India's 2025 soyoil imports from Nepal surged tenfold to 694,153 tons.
- Duty-free access allowed Nepal to double its total exports to India.
- Higher Nepali exports pressure Indian refiners and domestic prices.
In 2025, India witnessed a record-breaking import of 694,153 metric tons of soybean oil from Nepal, a significant tenfold increase from the previous year's 65,138 tons. This substantial rise was primarily driven by Nepal's advantageous duty-free access to the Indian market under the South Asian Free Trade Agreement (SAFTA).
This preferential trade arrangement allowed Nepali refiners to process crude soybean oil imported from countries like Brazil and Argentina and export the refined product to India without incurring import duties. As a result, Nepal's total goods exports to India doubled to $2 billion in 2025. Nepal's share in India's total soyoil imports grew to 12.3%, positioning it as the third-largest supplier.
Despite boosting Nepal's trade balance, the duty-free imports have put pressure on Indian edible oil prices, particularly in border areas. Indian refiners, who must pay duties on imported crude soyoil and local processing, find it difficult to compete with the cheaper supplies from Nepal. Industry officials suggest that further increases in Nepali exports are possible with new refineries expected to become operational soon.
