Nepal Edible Oil Businesses Demand Reduced Customs Duty on Sunflower Oil Amidst Indian Tariff Cuts
07/10/2026 (Ratopati), Kathmandu - As India has reduced the customs duty on sunflower oil by about 11 percent, Nepali edible oil businesses have demanded a reduction in customs duty in Nepal as well, citing the possibility of increased smuggled imports into Nepal.
The Indian government has reduced the customs duty on raw sunflower oil from 16.5 percent to 5.5 percent from September 24.
Even with 5 percent GST added to this, the cost price of refined sunflower oil in India will be only about 11 percent, making it cheaper than in Nepal and increasing the likelihood of smuggled imports from border areas, according to businesses. In Nepal, a 10 percent customs duty and 13 percent VAT are levied on raw sunflower oil.
If smuggled imports from India are not stopped and the customs duty on raw sunflower oil in Nepal is not reduced, domestic industries will find it difficult to compete in the market, said Nandkishor Rathi, Chairman of the Edible Oil Business and Industry Organization, Morang. He informed that immediately after the Indian government reduced the customs duty, the price of sunflower oil in India has become cheaper by about 10 rupees per liter.
Similarly, the Indian government has also reduced the customs duty on raw soybean and palm oil from 16.5 percent to 11.5 percent. While there is no possibility of smuggled imports due to the small difference in customs duty on soybean and palm oil, the significant reduction in the rate for sunflower oil is likely to directly impact Nepali edible oil industries, according to businesses.