According to the industry body, imports from Nepal increased from 47,295 tonnes in 2023 to 124,056 tonnes in 2024, before surging to more than 804,000 tonnes in 2025—a more than 17-fold jump in two years. At the current pace, annual imports could approach one million tonnes, potentially making Nepal one of India’s largest suppliers of refined edible oils.
The association said the unprecedented increase marks a structural shift in India’s edible oil trade and warrants immediate policy attention to ensure that trade agreements remain aligned with domestic value addition, farmer welfare and long-term edible oil security.
“India remains committed to the objectives of the SAFTA Agreement and regional economic cooperation. However, the extraordinary pace and scale of duty-free refined edible oil imports call for a comprehensive policy review to ensure preferential trade arrangements continue to promote genuine regional value addition while safeguarding the competitiveness of India’s domestic refining industry,” said Sudhakar Desai, President, IVPA.
India is the world’s largest importer of edible oils and relies heavily on imports to bridge the gap between domestic production and consumption. While government policy has encouraged domestic refining to generate employment, investment and value addition within the country, IVPA said the recent surge in duty-free refined oil imports is shifting refining activity outside India.
The association said domestic refiners continue to import crude edible oils after paying customs duty and Agriculture Infrastructure and Development Cess (AIDC), putting them at a competitive disadvantage against duty-free refined oil imports. It warned that the trend could impact refining capacity utilisation, future investments, manufacturing competitiveness and demand for domestically produced oilseeds such as soybean and mustard.
IVPA also estimated that the rising duty-free imports could result in an annual customs revenue loss of ₹2,000-2,500 crore, while transferring value addition outside India.The industry body has asked the government to verify compliance with the Rules of Origin (RoO) under SAFTA through stricter implementation of the Customs Administration of Rules of Origin under Trade Agreements Rules (CAROTAR), 2020. It noted that Nepal has limited domestic production of palm oil and soybean, making verification of origin important to ensure that preferential tariff benefits are extended only to products meeting the prescribed criteria.
“Our representation is not intended to restrict legitimate bilateral trade with Nepal or dilute India’s international commitments. It seeks to preserve the integrity of India’s trade agreements by ensuring that preferential tariff benefits accrue only to products genuinely qualifying under the Rules of Origin, while maintaining a level playing field for Indian industry,” Desai said.
Besides stronger verification of Rules of Origin, IVPA has also sought a review of the existing tariff structure to ensure continued support for domestic value addition.
The association said India’s long-term edible oil security depends not only on reliable access to imports but also on maintaining a globally competitive domestic refining industry that supports farmers, creates jobs and strengthens manufacturing and supply chains.