Nepal's Duty-Free Soyoil Boom: A Himalayan Surge

Nepal's soybean oil exports to India skyrocketed more than tenfold in 2025, reaching a record high, thanks to duty-free access under the South Asian Free Trade Agreement (SAFTA). This boost allowed Nepal to nearly double its total exports to its southern neighbor, as reported by industry officials to Reuters.

The surge in exports has not only helped Nepal reduce its trade deficit with India but also put pressure on edible oil prices in Indian border regions. Indian refiners, burdened with import duties, find it challenging to compete with Nepal's cheaper soybean oil, which hit 694,153 metric tons in 2025, a dramatic increase from the previous year's 65,138 tons, according to data from India's Ministry of Commerce and Industry.

With the world's largest vegetable oil importer, India, raising its import duty on refined soyoil from 13.75% to 35.75% in 2024, Nepali refiners imported crude soyoil from Brazil and Argentina, processed it locally, and then exported it to India duty-free. This strategy elevated Nepal to become the third-largest exporter of soybean oil to India in 2025, following Argentina and Brazil.