Kathmandu, Jan. 9 -- India on Wednesday imposed restrictions on imports of refined palm oil, in a move seen as a retaliation against Malaysia, but its repercussions are likely to be immediate in Nepal, as Nepal's largest export is refined palm oil.

While government officials are worried about the restriction's impact on Nepal's export volume, experts say this situation was a long time coming, as traders had been exploiting a zero tariff facility on essential products.

India is the world's biggest market for edible oil and Malaysia its top supplier. But on Wednesday, the Indian government said that it had amended its imports policy to designate refined palm oil imports "restricted" from "free", effectively meaning a complete ban.

Accord...