Despite India’s recent decision to halt the import of several Bangladeshi goods through the Fulbari land customs point, trade between Nepal and Bangladesh via the same route remains unaffected, officials and business leaders have confirmed.
The Fulbari–Banglabandha checkpoint is the primary trade route between Nepal and Bangladesh. When India restricted the entry of Bangladeshi goods such as ready-made garments through this route in mid-May, concerns arose about potential disruptions to Nepal-Bangladesh trade. However, India clarified that it would not obstruct transit trade between Nepal and Bangladesh.
“So far, there have been no problems in imports and exports between Nepal and Bangladesh,” said Harihar Paudel, Chief of Mechi Customs Office in Kakarbhitta. “Trade is running smoothly in both directions.” He added that potatoes are being imported into Nepal from both Bangladesh and Bhutan under a letter of guarantee.
Pannalal Jain, Founding President of the Nepal-Bangladesh Chamber of Commerce, observed that Nepal has begun supplying goods to Bangladesh that were earlier sourced from India. “This opens a window of opportunity to address Nepal’s decade-long trade deficit with Bangladesh,” he said.
Jain urged the Government of Nepal to leverage this opportunity by engaging in talks with Dhaka to secure trade benefits under the South Asian Free Trade Agreement (SAFTA). He emphasized the need to seek customs exemptions on Nepali agricultural exports in line with past commitments.
Nepal primarily exports agricultural goods to Bangladesh. With India suspending plywood exports to Bangladesh, Nepali exporters now see a chance to fill the gap—though diplomatic backing will be necessary, Jain noted.
Rakesh Surana, President of the Morang Trade Association, echoed the need for a bilateral trade agreement between Nepal and Bangladesh and emphasized its proper implementation. “If barriers to the transportation of both agricultural and non-agricultural goods are addressed, trade levels could return to what they were a decade ago,” he said.
Surana had earlier discussed trade cooperation and partnerships with former Bangladeshi Ambassador to Nepal, Salahuddin Chowdhury, who expressed commitment to facilitate trade relations between the two countries.
Despite the long-standing trade deficit with Bangladesh, Nepal has made limited efforts to reverse the trend, leaving the private sector dissatisfied. Nepal began bilateral trade with Bangladesh via the Fulbari route on August 30, 1997. In the initial years—including FY 1999/2000—Nepal recorded a trade surplus, exporting goods worth Rs 942.3 million while importing only Rs 413.2 million.
From FY 2007/08 to FY 2013/14, Nepal again enjoyed a trade surplus driven by agricultural exports such as wheat and lentils. However, since FY 2014/15, the trade balance has remained in deficit.
Former Mechi Customs Chief Ram Prasad Regmi attributed this to declining exports of Nepali agricultural and industrial goods, alongside rising imports of Bangladeshi consumer products like electronics and household appliances.
Though recent political changes in Bangladesh briefly disrupted trade, current operations are proceeding without issues, according to customs officials.
Jain emphasized that while reducing Nepal’s trade deficit with India may take time, reversing the trade imbalance with Bangladesh is more achievable. He suggested that a Free Trade Agreement (FTA) covering agricultural products could significantly boost Nepal’s exports. “Bangladeshi customs duties on Nepali agricultural goods go as high as 80 percent, severely limiting trade volume,” he said.
Gopal Bahadur Budhathoki, Mayor of Mechinagar Municipality, added that the municipality is exploring sister-city partnerships with Bangladeshi cities to boost exports. He noted that the suspension of lentil exports—once a major contributor to Nepal’s trade balance—has worsened the deficit. He too emphasized the urgency of negotiating an FTA for agricultural goods, citing reduced demand for industrial exports.
In 2019, during a commerce secretary-level meeting in Dhaka, Bangladesh had agreed to provide duty-free access to 108 Nepali agricultural products. However, implementation has yet to follow. Jain said Bangladesh was to receive customs-free access to 50 products—including fish, potato chips, refrigerators, batteries, garments, plastic items, cement, tobacco, tomato sauce, and biscuits.—in return.
