Subscribe
Import of cheaper, duty-free edible oil is causing losses to oilseed farmers while also threatening the survival of domestic processors, and the edible oil industry has urged the government to regulate the influx of cheap refined cooking oil, especially from Nepal.
Edible oil industry body Solvent Extractors’ Association of India (SEA) pointed out in a letter to Prime Minister Narendra Modi on February 10 as to how duty-free imports under SAFTA (South Asia Free Trade Area) was driving a “massive influx” of refined soybean oil and palm oil from Nepal and other South Asian countries.
SAFTA is an agreement between South Asian countries to promote economic cooperation and trade. Due to a duty advantage under it, Nepalese refiners have been importing crude oil and exporting discounted refined oil into India.
The agreement, SEA said, was being used by countries to dump their products duty free into India, suppressing commodity prices in the domestic market and hurting farmers and agro-product processors.
In fact, Nepal produces little soybean oil itself but still the exports have been soaring.
As per import and export data, between October 15, 2024, and January 15, 2025, while Nepal imported 1,94,974 tons of edible oil (mainly crude soybean and sunflower oil), it exported 1,07,425 tons of edible oil to India during the same three-month period. The import figure surpasses the country’s own monthly edible oil requirement of around 35,000 tons (annual 4,30,000 tons).
“What started as a trickle in the beginning has now assumed alarming proportions and is not only threatening the very survival of vegetables oil refining industry in eastern and northern India but also resulting in huge revenue loss to the government of India. Apart from these losses, it is harming the interests of oilseed farmers as it results in distorting our markets and the very purpose of keeping high import duties on edible oils is getting negated,” said Sandeep Asthana, President, SEA.
He requested the government to intervene by initiating a provisional safeguard measure under the SAFTA agreement and suspend the import of duty-free edible oil to India. The letter also urged imposing a minimum import price (MIP) for the edible oil coming from SAFTA countries.
The letter was also marked to Home Minister Amit Shah, Finance Minister Nirmala Sitharaman, Commerce and Industry Minister Piyush Goyal, Agriculture and Farmers Welfare Minister Shivraj Singh Chouhan, and Consumer Affairs and Food and Public Distribution Minister Pralhad Joshi.