Nepal has witnessed a substantial surge in the export of refined soybean and sunflower oil to India, attributed to duty-free privileges. This follows India's decision to increase customs duties on crude soybean, sunflower, and palm oil imports from other countries. However, exports of palm oil have declined, according to the Department of Customs.

In early September, India raised the customs duty on crude soybean, sunflower, and palm oil from zero to 20%, with a total tax rate of 27.5% including other levies. Nepalese exporters capitalised on the zero-duty export agreement under the Nepal-India Trade Treaty to boost exports of refined oils to India.

According to data released by the Department of Customs on Sunday, Nepal exported soybean oil worth Rs 8.36 billion during the first five months of the current fiscal year (FY 2024/25), compared to exports of just Rs 363.1 million during the same period in the previous fiscal year.

Similarly, the export of refined sunflower oil reached Rs 2.97 billion during this fiscal year, a significant increase from Rs 148.7 million in the same period last year. In contrast, exports of refined palm oil declined from Rs 2.47 billion during the first five months of the previous fiscal year to Rs 851.2 million in the corresponding period of the current fiscal year.

Soybean oil, carpets, cardamom, sunflower oil, and tea were among the top export commodities during this period. By mid-December 2024, Nepal's total exports amounted to Rs 73.65 billion, marking a 16.54% increase compared to the same period last year.

On the import side, petroleum products led the chart, with imports exceeding Rs 117.56 billion by mid-December. Other significant imports included iron and steel (Rs 54.42 billion), electrical equipment and components (Rs 45.25 billion), vehicles (Rs 41 billion), and vegetables (Rs 19.5 billion). Total imports in the first five months of the fiscal year reached Rs 661.48 billion, up by 3% compared to Rs 642.2 billion during the same period last year.

Nepal's trade deficit as of mid-December stood at Rs 587.82 billion, a 1.52% increase compared to the previous fiscal year's figure of Rs 579 billion. The relatively slower growth in the trade deficit is due to a higher growth rate in exports compared to imports.

Imports accounted for 89.98% of Nepal’s foreign trade, while exports made up 10.02%, reflecting a slight improvement in export share. India remained Nepal’s largest trading partner, with imports from India totalling Rs 410 billion, and exports to India reaching Rs 52 billion, resulting in a trade deficit of Rs 358 billion. Nepal imported goods worth Rs 131 billion from China, while exports to China were only Rs 1.74 billion.

By mid-December, Nepal’s total foreign trade reached Rs 735.14 billion, a 4.21% increase compared to the same period in the previous fiscal year, when the figure was Rs 705.41 billion.