After India diplomatically elbowed Malaysia’s palm oil trade, on its interference in New Delhi’s internal affairs, Nepal has been chancing to grow its export outreach with New Delhi
New Delhi: After India severed its Palm oil trade ties with Malaysia over its interference in New Delhi’s internal affairs, Nepal seems to be keen on the resuming business of refined palm oil with its Himalayan neighbor. According to Nepalese authorities, New Delhi has reportedly heeded on a positive note to the trade calls echoed by Kathmandu, since a month.
On 10 January, the Indian Directorate General of Foreign Trade (DGFT) had issued a notification levying a complete restriction on import of refined bleached deodorized palm oil and palmolein. The diplomatic snap-on palm oil trade was primarily aimed at Malaysia for criticizing the Prime Minister Narendra Modi-led government’s new citizenship law and abrogation of Article 370 from Kashmir. However, the blanket restriction also affected Kathmandu’s trade of refined palm oil to New Delhi.
Since then, the Kathmandu has been holding formal bilateral discussions and informal talks with New Delhi, convincing them to resume the snapped palm oil trade. And the talks seemed to have paid off. As sources in the Nepalese government claimed that their Indian counterparts have agreed to allow their traders to import refined palm oil from Nepal.
“The first meeting was called on 18 January, wherein we formally asked them (Indian officials) to allow Nepalese traders to export palm oil and other related goods in the Indian markets. This was followed by a series of meetings, discussions both formal and informal, which now seem to have fructified,” a senior officer at the Nepalese Ministry of Industry, Commerce, and Supplies (MoICS) told TheNews21.
Government to government discussions have been ongoing carried out ever since Nepal became a secondary victim to India’s reported trade ban. Nepal is a small exporter of the palm oil and products, ranging from one kg to 15 kg, which is widely used by Indian households.
This restriction levied hit the small exporter hard. As per records with MoICS, Nepalese traders had already rolled out refined palm oil worth Rs 8.36 billion to India in the first four months of this fiscal, making it the country’s largest export item. This pinched Nepal’s trade deficit, which has already reached an alarming level accounting to Rs. 414.02 billion. The palm oil ban also pushed the current account to a negative of Rs. 37.3 billion in the period.
Joint Secretary of MoICS, Nabaraj Dhakal said that though the country accounts to mere one percent of Indian import of palm oil and related products, the ban has caused dents. “Thus, there is hope that the restrictions on the import of refined palm oil from Nepal will be lifted. As India did not primarily intend to curb import of the product from Nepal,” Dhakal said.
While Indian officials in the capital remained unavailable to comment on the claims made and hopes pinned by Kathmandu, TheNewS21 learned that New Delhi is yet to officially convey its positive reply.
Nepal filters imported crude palm oil from Malaysia and Indonesia, and then post-processing packages it before wheeling it to India via the shared border highway.
With Pakistan assuring Malaysia to double its import of palm oil, after India diplomatically elbowed the South Asian nation on its interference in New Delhi’s internal affairs, Nepal has been changing to grow its export outreach.
For Prime Minister KP Sharma Oli government, the chance to swell its palm oil trade with India, also presents an opportunity to reduce the trade deficit with India and deepen economic ties with his counterpart Narendra Modi.
