Nepal achieved a record high in exports for the fiscal year 2025-26, with merchandise exports increasing by 13.8% to NPR 315.29 billion. However, this success is overshadowed by heavy reliance on a limited range of products and a single market, primarily India.
The largest export from Nepal was refined soybean oil, accounting for 40.8% of total merchandise exports and earning NPR 128.74 billion. Notably, almost half of Nepal’s exports fall under the category of animal and vegetable fats and oils, with edible oils contributing significantly to the export revenue.
Nepal’s refined cooking oil industry heavily relies on imported crude edible oil, mainly sourced from South American countries like Argentina. This dependence on imported raw materials highlights the vulnerability of Nepal’s largest export industry.
Trade data reveals that Nepal’s exports are heavily skewed towards India, with 82% of total merchandise exports amounting to NPR 258.65 billion directed to the Indian market. This heavy dependence on a single market poses a risk to Nepal’s export industry, as highlighted by trade experts.
Pressure is mounting on the Indian government from its own edible oil industry to address the surge in duty-free refined edible oil imports from Nepal under the South Asian Free Trade Area (SAFTA) agreement. The Indian Vegetable Oil Producers’ Association (IVPA) has urged the government to ensure alignment with trade, tariff, and domestic value-addition objectives.
