Iran-US conflict: Second attack within 24 hours, two missiles dropped near embassy.In a blow to palm oil exporters India has stopped importing refined palm oil from Nepal the country’s top export item generating fears that the already burgeoning trade deficit could widen further.India’s Directorate General of Foreign Trade yesterday issued a notification stating a complete restriction on import of refined bleached deodorised palm oil & refined bleached deodorised palmolein.
The restriction was aimed at taming Malaysia whose Prime Minister Mahathir Mohamad had recently criticised the Indian government’s actions in the Kashmir region & its new citizenship law.
This restriction also affects Nepal which had exported refined palm oil worth Rs 8.36 billion to India in the first 4 months of this fiscal making it the country’s largest export item.“Indian customs office today prevented Nepali traders from exporting the product to India citing directive from higher authorities” said Nabaraj Dhakal joint secretary & spokes person for the Ministry of Industry Commerce & Supplies.If the restriction continues Nepal’s trade deficit, which has already reached an alarming level will widen further hitting current account & balance of payments.
Nepal’s trade deficit stood at Rs 414.02 billion in the first 4 months of this fiscal according to Nepal Rastra Bank.
This pushed the current account to a negative of Rs 37.3 billion in the aforementioned period.
A widening current account deficit causes the foreign exchange reserves to shrink leaving a net importing country like Nepal with fewer foreign currencies to finance imports.“We have already discussed this matter with Indian officials over phone.
They are positive about exempting Nepal.
Meanwhile Indian officials said they would discuss the issue in detail with Nepal after getting the notification from DGFT & studying it” said Dhakal urging Nepali exporters of palm oil ‘not to worry’.“The restriction targets Malaysia and it shouldn’t affect Nepal.”