In the last seven months of the current fiscal year, crude edible oil worth 93.75 billion 4.6 million rupees has been imported, while refined edible oil worth 78.19 billion 6.1 million rupees has been exported. Of these, the highest import was 448.387 thousand 494 liters of crude soybean oil worth 70.99 billion rupees, according to the Customs Department.

During this period, 324,119,022 liters of refined soybean oil worth 66.78 billion 87 million rupees were exported. While the share of all types of oil in total exports is 46.5 percent, soybean oil accounts for 40 percent. 

In the first seven months of the last fiscal year, 259,295,353 liters of crude soybean oil worth 38.29 billion 73 million rupees were imported. Similarly, 158,138,831 kg of refined soybean oil worth 32.41 billion 61 million rupees were exported. The data shows that in the current fiscal year, the import of crude soybean oil has increased by 85.38 percent and the export of refined soybean oil has increased by 106 percent.

After the Indian government reduced the basic customs duty on crude palm oil, soybean oil and sunflower oil from 20 percent to 10 percent and refined oil remained unchanged at 35.75 percent on 30 May 2025, there has been a direct impact on the import of crude oil and the export of refined oil in Nepal. India had increased import duty on both crude and refined edible oils by 20 percent in September 2024 with the aim of protecting domestic oilseed farmers. As a result, the total import duty in India came down from 27.5 percent to 16.5 percent. But the unexpected benefit of the decision reached Nepal.

Former joint secretary and trade expert Ravi Shankar Sainju says that there is no significant value addition (value added) in importing and exporting crude soybean oil. Currently, most edible oil exports are limited to minimal processing, and in most cases, imported liquid oil is exported only after repackaging.

The US has reduced the customs duty on Indian goods from 25 percent to 18 percent. US President Donald Trump made this announcement as India prepared to stop buying oil from Russia. As preparations are underway to sign a bilateral trade agreement between the US and India by next March, Sainju says that it will have a major impact on Nepal's oil import and export. 'An agreement may be reached whereby India can import refined soybean oil from the US at zero percent.' If that is the case, why would India take it from Nepal?’ He said, ‘A trade agreement between the US and India will have an impact on Nepal’s oil import and export.’

Rather than importing crude oil to Nepal and packaging it and exporting it to India, refined oil can easily come from the US, says Sainju. ‘The increase in the export of edible oil has only benefited a few business groups, and has not created real value addition or employment in Nepal,’ he said, ‘Therefore, emphasis should be placed on exporting goods produced in Nepal or at least significant value addition should be ensured when re-exporting.’ Sainju said that if soybeans are imported and oil is produced and exported, a large number of jobs will be created and even oilseeds can be sent abroad.

He said that Nepal should now review its trade policy with all countries, including India, considering the current trade situation in the world. ‘It is too late to review Nepal’s trade agreement with India,’ he said, ‘We should also review our trade policy with other countries and find new markets for trade.’

Experts had also suspected that the tax revision by India in May 2025 would have a major impact on the export of refined edible oil from Nepal. Indian traders have to pay 16.5 percent tax when importing crude oil and 35.75 percent tax when importing refined oil. Nepalese traders have to pay 24.30 percent tax when importing crude soybean oil from a third country and 18.65 percent tax when importing from a SAARC country.

Crude oil is imported from a third country. There is no tax in Nepal when refined oil is exported to India. That is, there is a customs exemption when exporting to India under the South Asian Free Trade Area (SAFTA). That is why experts say that crude oil comes to Nepal and is processed and sent to India. 

According to the department’s seven-month data for the current fiscal year, goods worth Rs. 1,123.4862 billion were imported. During the same period, there is data that goods worth 168.14 billion rupees were exported. Soybean oil has a higher share in the highest import and export of oil. Nepal's foreign trade has been seen to revolve around soybean oil rather than the export of domestic goods. Which is a volatile trade.

Raw soybean oil is imported from Argentina, Brazil, China, Thailand, Paraguay, Ukraine, and Qatar, while refined oil is exported only to India. According to the department, the highest import of 372.427 thousand 819 liters of crude soybean oil worth 59.13 billion rupees was from Argentina and the lowest import of one liter of crude soybean oil worth 1,000 rupees was from Qatar.

Nepal has been seen to have processed and exported imported goods rather than exporting domestic goods. While Nepal exported goods worth 168.14 billion rupees in seven months, it has sold only 8.61 billion rupees of domestically produced cardamom. Cardamom ranks second among exported goods, while sunflower seeds and oil are third. Which has exported 5.78 billion rupees.