"This constitutes more than 80 per cent of the total vanaspati production in Nepal which stands at 1,22,000 now," he said, adding that this unlimited exports have adversely affected the production of Indian vanaspati units, which are mostly concentrated in the eastern region.

Cheap imports of vanspati is facilitated under the Indo-Nepal Treaty which has more political content than economic rationale, and goes against the canon of bilateral trade between the two countries on the basis of reciprocity and mutual advantage, Chadha added. He said Nepal enjoyed the twin advantages of duty-free imported input and a meagre three per cent export tax on vanaspati. "This gives the country a Rs 60 to Rs 70 price advantage per tin of 15 kg while Indian importers continued to pay 16.5 per cent customs duty on import of edible oils as against nil duty paid by Nepalese importers on edible oils," Chadha added. Chadha said cheap imports had led to closure of about 50 per cent of vanaspati units in the eastern zone and reduction in the capacity utilisation to almost 22 per cent compared to capacity utilisation of 34 per cent on an all-India basis.

"While Indian industry is suffering from low capacity utilisation since last year, vanaspati exports from Nepal has touched 1.58 billion Nepalese Rupees," he added.

He said Nepalese vanaspati was easily transported to India through the porous borders of Bihar, Uttar Pradesh and West Bengal from border posts like Raxual, Jogbani and Panitanki.Moreover, Chadha said the Nepalese vanaspati is also of inferior quality and does not conform to the standars of specifications laid down in the Prevention of Food Adulteration Act (PFA) and Rules which are mandatory for both indegenous and imported vegetable oil products.