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Nepal’s exports surged by nearly 89 percent in the first two months of the current fiscal year, but the sharp rise has once again exposed the country’s growing overdependence on refined edible oil shipments to India.

According to the Department of Customs, Nepal exported goods worth Rs 47.32bn during mid-July to mid-September, compared to Rs 25.09bn in the same period of last fiscal year. Nearly half of the export earnings came from soybean oil alone, while sunflower oil and palm oil took the second and third spots, respectively.

In just two months, Nepal exported 509,962 tons of soybean oil worth Rs 20.42bn (509,962 tons) to India. Sunflower oil followed with Rs 1.38bn (35.2m liters) in exports, also to India. Refined palm oil, which ranked low in last year’s list, jumped to third place with Rs 1.31bn (7.4m liters) in shipments.

Nepal’s edible oil trade with India has flourished largely because of a loophole in regional trade agreements. Under the South Asian Free Trade Area (SAFTA) and the bilateral India-Nepal Trade Treaty, Nepali exports to India enjoy zero-duty access. In contrast, exporters outside South Asia face a 35 percent tariff on soybean oil exports to India. This makes Nepali refined oil significantly cheaper for Indian buyers.

Nepal imports almost all of its crude soybean oil from countries such as Argentina, Brazil, China, Iraq, Thailand, and Ukraine, refines it, and re-exports it to India. Domestic production of soybean, which was just 36,671 tons in 2023, is insufficient even to meet local demand.

Experts say this re-export model leaves Nepal highly vulnerable to Indian policy changes. Indian refiners, led by the Solvent Extractors’ Association of India (SEA), have long complained that cheaper Nepali oil has been affecting their business. Earlier this year, SEA urged the Indian government to regulate edible oil imports from Nepal and other SAARC countries.

If India were to curb these imports, Nepal’s export earnings would collapse overnight. This will put investments made in refining plants at serious risk.

The Nepal Stock Exchange (NEPSE) plunged by 27. 89 points to close at 2, 654. 35  points on Wednesday.

Similarly, the sensitive index dropped by 4. 97 points to close at 459. 38 points.

A total of 9,408,663-unit shares of 317 companies were traded for Rs 4. 12 billion.

Meanwhile, Mathillo Mailun Khola Jalvidhyut Limited (MMKJL) and City Hotel Limited (CITY) were the top gainers today with their price surging by 10. 00 percent. Likewise, Unnati Sahakarya Laghubitta Bittiya Sanstha Limited (USLB) was the top loser as its price fell by 5. 38 percent.

At the end of the day, the total market capitalization stood at Rs 4. 43 trillion.

The price of gold reached an all-time high in the domestic market on Wednesday, setting a new historical record.

According to the Federation of Nepal Gold and Silver Traders, the price of gold has increased by Rs 1, 300 per tola to reach Rs 223, 000 per tola today.

Similarly, the price of silver has increased by Rs 20 and is being traded at Rs 2, 700 per tola.

Nepal’s private sector has said that the violent GenZ protests of Sept 8 and 9, which left government offices and private establishments vandalized and torched, have inflicted losses running into billions of rupees, setting the economy back by years.

Speaking at a discussion organized Tuesday by the Nepal Economic Journalists’ Association on the theme “The Road Ahead for Economic Recovery,” business leaders said the destruction has undermined investor confidence, shaken the foundations of industries, and halted incoming investments.

Confederation of Nepalese Industries (CNI) president Birendra Raj Pandey estimated that the protests cost the economy around five percent of gross domestic product (GDP). “For investors, security of capital is fundamental. But the violent destruction of public and private structures has eroded confidence. The government must now step in with supportive fiscal and monetary policies to help businesses recover,” Pandey said.

He urged the government to design both short- and long-term recovery strategies, including special facilities for large industries. He also highlighted the need for reforms in education and improvements to laws that remain complicated and difficult to implement. According to him, the unrest has already stalled major joint-venture investments that were in the pipeline.

Federation of Nepalese Chambers of Commerce and Industry (FNCCI) vice president Hemraj Dhakal described the protests as a “massive setback.” The destruction of large public and private infrastructures, he said, has crippled the economy. “We are ready to rise from the ashes, but what is the guarantee that such destruction won’t happen again? The government must provide a security guarantee,” Dhakal said.

Former president of Nepal Chamber of Commerce Rajendra Malla said the unrest has created an atmosphere of fear across the business community. He stressed that peace and security must be the government’s immediate priority and urged authorities to assure entrepreneurs that they need not fear operating in Nepal.

Malla also called for policies that would encourage youth to stay and work in Nepal rather than leaving for foreign employment. He identified startups, IT, artificial intelligence, and rural technology programs as areas where the government could foster growth. “Tourism has taken a severe hit, but Nepal can still brand itself as a safe destination if the government acts quickly,” he added.

Business leaders further warned that widespread informal transactions and the misuse of remittances have aggravated Nepal’s economic vulnerabilities. Unless structural reforms and effective utilization of resources are ensured, they cautioned, the country risks being pushed five to six years behind its development trajectory.