Kathmandu, July 25 -- Nepal exported 704,844 tonnes of refined soyabean, palm and sunflower oil worth Rs146 billion to India in the last fiscal year, even though it produces only a negligible amount of the raw materials. Experts say the trade is a classic example of a rent-seeking business that exploits tariff differentials rather than generating genuine domestic value.

The rapid growth of edible oil exports has raised concerns in both Nepal and India. Nepal spends dollars importing crude edible oils from third countries but earns Indian rupees by exporting refined products to India. Indian vegetable oil producers, meanwhile, argue that duty-free imports from Nepal are undercutting their domestic processing industry.

According to a repo...