KATHMANDU (THE KATHMANDU POST/ANN) – Processed soybean oil and palm oil have knocked juice, jam and footwear off the list of largest exports to India.
According to statistics issued by the Birgunj Customs Office, soybean and palm oil shipments in the first five months of the fiscal year were worth Rs8.58 billion.
Exports of palm oil, which is not produced domestically, have increased exponentially over the past year.
In the previous year, the customs office recorded Rs2.4 billion worth of exports of edible oils in the first five months. According to Information Officer of the Birgunj Customs Office Bimal Shah, traders began exporting processed oils from the last fiscal year after India relaxed its provisions on importing soybean and palm oils.
Nepal does not produce any soybean or palm oil and traders import crude oils from Brazil, Argentina, Ukraine, Indonesia, Australia and other countries which they process and export to India without paying a penny in tariffs.
Under the South Asian Free Trade Area (SAFTA) agreement, zero tariffs are levied on goods exported from underdeveloped countries like Nepal, and Nepali traders have been importing crude palm oil from third countries by paying minimum customs duty, and then exporting the finished product to India free of customs duty.
“If the oils were imported for domestic consumption, the traders would have to pay 10 per cent customs duty and 13 per cent value-added tax; but in the case of exports to India, no tariffs are levied,” said Shah.