India has generally raised import tariffs on edible oils. In the past six months, edible oil exports to India have surged via Nepal.

Nepal has seen a significant trade pattern emerge, with the country importing around 170,000 tons of crude soybean oil in the first half of the fiscal year and exporting 91,000 tons of processed soybean oil to India. The main sources of the crude soybean oil were Argentina, Benin, Brazil, Paraguay, Thailand, Togo, and Ukraine. However, Nepal's domestic production of crude soybean oil is insufficient to meet local demand, let alone for export. This trade trend began in the 2018/19 fiscal year and peaked in the 2021/22 fiscal year. The reduction of tariffs on major raw and refined edible oils by India led to a significant drop in Nepal's processed soybean oil exports but was reversed in September 2024. The International Food Policy Research Institute and a former executive director of the Central Bank of Nepal have raised concerns about the long-term sustainability of this trade model and its impact on economic stability and job creation.

Nepal imported about 170,000 tons of crude soybean oil in the first half of this fiscal year and exported 91,000 tons of processed soybean oil to India. The above crude soybean oil was mainly imported from Argentina, Benin, Brazil, Paraguay, Thailand, Togo and Ukraine. Nepal refines and processes the crude soybean oil domestically and then exports it to India. Nepal's domestic production of crude soybean oil is very small, only 31,600 tons per year, which cannot even meet a small part of local demand. The trend of Nepal exporting large amounts of edible oil to India began in the 2018/19 fiscal year, when Nepal imported 13.43 billion rupees of crude soybean oil and exported 2.34 billion rupees of processed soybean oil. In the 19/20 fiscal year, imports increased to 18.72 billion rupees and exports reached 12.69 billion rupees. In the 2021/22 fiscal year, the trend reached its peak, with imports of 56.18 billion rupees and exports of 48.12 billion rupees. That year, the Indian ...