Nepal’s Plywood Exports to India Resume after a Gap of Nine Months

After months of disruption, Nepal’s plywood exporters have finally received relief as exports to India can now resume smoothly. The bottleneck had begun in February when India made the Bureau of Indian Standards (BIS) certification mandatory for plywood imports from Nepal.

For months, Nepalese plywood industries faced repeated export hurdles, with consignments halted at Indian entry points for inspection by India’s Directorate of Revenue Intelligence (DRI). Even BIS-certified goods were subjected to investigations, often on suspicion that uncertified materials were mixed in. The situation began improving only after the active intervention from the Government of Nepal on this matter.

According to the Nepal Plywood Manufacturers Association (NPMA), Finance Minister Rameshore Khanal’s initiative led to the renewal of BIS certification for nine compliant industries. Additionally, seven new plywood factories are now in the process of obtaining BIS approval. “The renewal of old certifications and ongoing approval for new ones have provided much-needed relief to the sector,” said NPMA President Hom Prasad Ghimire.

Earlier this year, DRI had investigated six plywood-laden trucks at the Jogbani customs yard and eight at Panitanki near Kakarbhitta. The consignments were later released. Diwakar Rathi, operator of Green Ply Industry in Biratnagar, confirmed that exports from his plant are now operating without obstacles. Out of 75 plywood industries across Nepal, nine long-established exporters have renewed their BIS certificates, while seven new firms are in the certification process.

Customs data shows consistent growth in Nepal’s plywood exports over recent years. Exports worth Rs 350 million were recorded in FY 2021/22, which rose to Rs 4.7 billion in FY 2022/23, and further to Rs 7.43 billion in FY 2023/24.

Steel Industry Under Severe Pressure

While the plywood sector is recovering, Nepal’s steel industry is facing a deepening crisis following India’s decision to make BIS certification mandatory even for raw materials imported into Nepal.

Aarti Strips Pvt. Ltd., a multinational company based in Budhiganga, Morang, has been unable to export its steel products to India for the past three months. Due to the absence of BIS approval, the company has slashed production by 90 percent and sent workers on forced leave. The firm, which used to export steel sheets, pipes, and colored zinc sheets worth around Rs 9 billion annually, is experiencing its operations almost completely halted.

Aarti Strips’ manager, Vishal Gupta, stated that the company is now in the process of obtaining BIS certification and plans to resume exports once it is approved. The company had exported goods worth Rs 9.9 billion in FY 2024/25 and employs about 1,100 workers directly.

Other steel manufacturers in Nepal have also been hit hard. Panchakanya Steel, operating within the Bhairahawa Special Economic Zone (SEZ), has stopped exporting its 1,000 and 5,000-liter overhead steel water tanks to India under the new policy.

According to Pawan Kumar Sharda, President of the Koshi Province chapter of the Confederation of Nepalese Industries (CNI) and operator of Premier Steel, India’s policy has proven detrimental to Nepal’s domestic manufacturers. “Nepali industries will now have to import BIS-certified raw materials from India to produce goods for re-export. This process is lengthy and expensive, forcing many factories to cut production,” Sharda said.

He added that India may have introduced this rule to control imports of Chinese-origin raw materials, but the direct impact has fallen on Nepalese producers. “Earlier, our industries imported affordable raw materials from China, processed them, and exported finished products to India, helping reduce Nepal’s trade deficit and generate employment. Now, those benefits are being lost,” he explained.

The production slowdown has led to significant job losses, as factories have reduced working hours and temporarily laid off employees. Declining output has also affected electricity bills, tax payments, and transportation costs, adding further strain to the industrial sector.

Industrial leaders have urged the Government of Nepal to take diplomatic action and engage in high-level discussions with India to resolve the BIS-related challenges. They warn that unless India simplifies its certification procedures, Nepalese exporters may be forced to seek alternative markets.