Kathmandu, Oct 27 (NationPress) Fuelled by a remarkable increase in the export of processed soybean oil, Nepal's exports to India have experienced a staggering rise of nearly 138 per cent during the initial quarter of the fiscal year 2025–26, according to the latest data from the country's Department of Commerce.

The department's foreign trade statistics indicate that Nepal's exported goods totaled NPR 59.12 billion in the first three months of the current fiscal year, which commenced in mid-July. This marks a year-on-year growth of 137.9 per cent.

In contrast, during the same timeframe last fiscal year 2024–25, the Himalayan nation exported goods valued at only NPR 24.85 billion. Nepal's largest trading partner remains India.

Data reveals that a significant portion of the export surge to India is attributed to the substantial exports of processed cooking oil, predominantly processed soybean oil, which amounted to NPR 30.69 billion, making up nearly 52 per cent of total exports to India.

Processed sunflower seed oil followed, with exports valued at NPR 2.13 billion, while palm oil ranked third with NPR 1.73 billion in exports. Exports of these products to India during the previous fiscal year were notably limited.

Nepali companies capitalized on duty differentials, as India imposes specific tariffs on edible oil imports from other nations, while Nepali products enjoy duty-free access to the Indian market under the South Asian Free Trade Area (SAFTA) agreement.

Despite India reducing its basic customs duty on crude edible oil from 20 per cent to 10 per cent in late May, the duty on refined oil remained unchanged at 32.5 per cent. The effective duty, including the Agriculture Infrastructure and Development Cess and Social Welfare Surcharge, stands at 16.5 per cent for crude edible oil and 35.75 per cent for refined oil.

Nearly all raw edible oil utilized in Nepal's export sector is sourced from various countries, processed domestically, and subsequently re-exported to India.

Trade expert Rabi Shankar Sainju cautioned that the substantial export of edible oil to India is not sustainable, as it depends on the duty differences applied to Nepali and third-country goods. "Should India significantly lower duties on edible oil imports from other nations, it could jeopardize 50 per cent of Nepal's total exports to India," he stated.

Although Nepal's exports to India have surged, the nation’s heavy dependence on the Indian market raises concerns among policymakers. Customs data indicates that during the first quarter of this fiscal year, Nepal's total exports to India constituted 81.23 per cent of the country's overall exports, which stood at NPR 72.78 billion.

Despite having an extensive border with China to the north, Nepal's exports to China remain minimal, totaling just NPR 186.42 million during the same period.

Sainju noted that inadequate cross-border infrastructure hinders Nepal's export potential to China.