KATHMANDU, Jan 23: Call it an “irony”, Nepal is an agricultural country in principle, but in practice this agrarian country imports rice to feed its hungry millions. The imports of the grains consumed as staple food by the majority of Nepali population has surged drastically by 103 percent in the first six months of the current fiscal year (FY 2024/25) as compared to the corresponding period of the last fiscal year (FY 2023/24).
According to the data maintained by the Department of Customs (DoC), a total of 381,318 metric tons of various categories of rice (including paddy, husked rice, basmati rice, broken rice, seeds of paddy, and other rice and paddy) was imported to Nepal from mid-July 2024 to mid-January 2025. In the corresponding period of the previous year, a total of 187,707 metric tons of such products were imported to Nepal.
The surge in import of the grains has also contributed to a steep rise of 113 percent in the revenue collection by the government from the excise duty levied on the import. The DoC’s data show that the government collected a total of about Rs 1.768 billion from the excise duty levied on the import of paddy in the review period of the current fiscal year, up from Rs 828 million collected in the corresponding period of the last fiscal year.
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Experts have attributed the significant increase in the import of paddy to the relaxation of the export duty on rice and paddy by the Indian government in 2024. On September 9, 2022, the Indian government had declared a 20 percent export duty on husked rice, parboiled rice and non-Basmati rice as well as a ban on export of broken rice. On July 27, 2023, the Indian government had declared a ban on export of non-Basmati and non-parboiled rice. All of these export restrictions were lifted in different phases in 2024.
Senior Agricultural Economist Mahanand Joshi at the Ministry of Agriculture and Livestock Development told Republica that the relaxation of export restrictions by the Indian government is the main reason behind the increment in the quantity of import of paddy in the current fiscal year. He added that the increase in import will not necessarily have a negative effect on the domestic producers of paddy and rice.
“Currently, Nepal does not have the capacity to produce enough rice to fulfill the internal demand for consumption. We need to import around 800,000 metric tons of rice to meet the demand,” he said, “The domestic production of rice is on the rise too, with an annual growth of around 261,000 metric tons.”
Subodh Kumar Gupta, managing director of Mohit Agro-Industries Pvt. Ltd, a leading importer of grains in Nepal, claimed that the amount of legally imported rice to Nepal has increased drastically due to the relaxation on export duty by the Indian government. This has curbed illegal imports by Nepali people to meet the overall demand.
“The demand for consumption of rice has remained steady year-on-year basis without a shortage last year, and the domestic production has increased, which implies that similar amount of rice was consumed last year too,” Gupta told Republica, “Due to the Indian export duty, many individuals were smuggling rice into Nepal and such imports were not tallied in the DoC’s data.”
Agricultural Economist Joshi added that Nepali rice producers need not worry about their produce amid the surge in imports as all of the domestic production is easily consumed internally and the farmers are paid adequately by the Food Management and Trading Company for their produce. “The domestic producers need not worry about the sale of their produce as all of it is consumed internally, and at good prices,” he said, “This year, we paid around Rs 3,500 per quintal for rice.”
