According to the Ministry of Industry, Commerce and Supplies, the Indian government has acknowledged receipt of the letter, but it has not said anything about removing the restriction.

On Wednesday, high-level government officials met with Indian Embassy officials and asked them to fast-track the process of lifting the ban.

Exports of refined palm oil have come to a virtual halt since January 9 after India’s Directorate General of Foreign Trade issued a notification saying the foreign trade policy had been amended from 'free' to 'restricted' for refined palm oil trade.

“We have sent a letter to the Indian government through the Foreign Ministry, but we have not heard anything from them,” said Navaraj Dhakal, joint secretary at the Ministry of Industry, Commerce and Supplies.

Baikuntha Aryal, another joint secretary at the ministry, said they were following it up.

“The Indian side suspects that the crude palm oil being imported into Nepal and re-exported to India does not have the value addition as prescribed in the South Asian Free Trade Area agreement,” he said. In order for the palm oil to qualify as an originating good of Nepal, it has to satisfy the 30 percent value-added rule. “But this issue has been sorted out.”

According to government officials, the Indian government has been studying the refined palm oil business in Nepal, and as the country consumes a huge quantity of edible oil, it may come up with a conclusion soon.

“It may take time for India to amend its policy,” said Dhakal, adding that until then the ministry could do nothing but wait for the new trade policy, particularly on processed palm oil.

Despite the import ban, Indian traders who have a special permit are allowed to buy processed edible oil from Nepal. But this arrangement has not been implemented, according to Nepali oil traders and manufacturers.

The Indian government said the decision to restrict imports of palm oil was not country-specific but product-specific. It has clarified that the product has been put in the restriction category and has not been prohibited.

According to the statistics of the Trade and Export Promotion Centre, Nepal exported palm oil worth Rs11.5 billion in the first five months of the current fiscal year.

The immediate impact of the import restriction has been seen in profits, said refined oil traders.

After imports of edible oil from Indonesia and Malaysia were halted, prices rose by 5 percent in the Indian wholesale market, reported Economic Times. India has been importing 150,000-200,000 tonnes of refined palm oil annually from Indonesia and Malaysia and another 40,000-45,000 tonnes from Nepal and Bangladesh, states the news report.

The Indian government’s restriction follows Malaysian Prime Minister Mahathir Mohamad’s criticism of New Delhi’s actions on Jammu and Kashmir and the new citizenship law.