Biratnagar: Nepal’s steel manufacturers are facing severe disruptions following India’s recent mandate requiring quality certification for all raw materials used in steel production.
This regulatory change has not only impacted domestic production but also choked Nepal’s steel exports to its southern neighbor, according to industry stakeholders.
The new rules now compel Nepali steelmakers to obtain Bureau of Indian Standards (BIS) certification even for importing raw materials from India – a requirement previously limited only to finished export products.
“We’re now forced to import India-certified raw materials to manufacture steel utensils for export back to India,” explained Pawan Kumar Sarada, director of Premier Steel Industry.
The two-month-old policy appears designed to block Chinese-sourced materials, he observed, noting that Nepali manufacturers traditionally imported Chinese raw materials to produce goods for the Indian market.
The policy has hit hardest at Nepal’s major steel hubs. While Sunsari-Morang Industrial Corridor has minimal steel utensil production, the Bhairahawa Special Economic Zone (SEZ) – home to most such industries – has seen operations grind to a halt.
Aarati Strips’ steel pipe exports have stalled completely. Similarly, Bhairahawa-based Vistaar Global and Panchakanya Stainless Steel – which previously exported value-added products to India with proper documentation from Nepal’s Industry Department – now find their supply chains broken.
“This directly violates the spirit of the Nepal-India trade treaty,” said Deependra Sahoo, MD of Panchakanya Group, whose monthly water tank exports worth Rs 50-60 million have stopped entirely.
“For months, we’ve been importing Chinese materials to make water tanks for India. Now everything’s frozen.”
Vistaar Global’s store manager Laxman Gupta revealed their 400-ton monthly production of household steelware – 80 percent destined for India – has shrunk to 25-30 tons, now dumped in Nepal’s already saturated market.
Customs data paints a grim picture. Bhairahawa Customs Chief Ram Prasad Regmi confirmed zero steel utensil exports for two months, compared to Rs 736.258 million worth shipped last fiscal year.
“The Indian policy has completely halted exports this year,” Regmi stated.
As Nepal’s steel industry grapples with these non-tariff barriers, manufacturers warn of impending layoffs and factory closures unless the two governments find urgent solutions to this trade impasse.
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