Bangladesh’s Export Ban Drives Up Costs for Nepali Jute Mills

Nepali jute manufacturers say their production costs have risen sharply after Bangladesh imposed an indefinite ban on raw jute exports nearly two months ago, forcing domestic mills to import more expensive jute from India.

Bangladesh restricted raw jute exports on September 8, citing a decline in domestic output and the need to secure supply for its own industries. Although Dhaka’s Ministry of Commerce classified raw jute exports as “conditional,” Nepali producers say exporters are not receiving the required permits even when all documents are submitted.

India, too, has seen a drop in production this year, according to Indian media reports, putting further pressure on prices.

For years, mills in the Sunsari–Morang industrial corridor have relied heavily on Bangladeshi jute—cheaper and of better quality—to manufacture finished jute goods for export, mainly to India. Six jute mills operate in the corridor, requiring roughly 70,000 tonnes of raw jute annually. Of this, domestic production covers only around 20,000 tonnes, with the remainder imported from Bangladesh and India.

Industry representatives say the shift to Indian jute has increased their production cost, making it harder to compete in the Indian market, where around 95 percent of Nepal’s jute goods are exported.

“Indian raw jute is costlier and of lower quality compared to Bangladeshi jute. If Bangladesh does not resume exports, Nepal’s production could fall by more than half,” said Som Adhikari, General Secretary of the Nepal Jute Industries Association.

Producers say Bangladeshi jute is typically Rs 10–15 per kilo cheaper than the Indian variety. The industry, already burdened by India’s 4 percent anti-dumping duty on Nepali finished jute goods, had increasingly shifted toward Bangladeshi raw material in recent years.

Rajkumar Golchha, President of the Nepal Jute Industries Association, said global production of jute has dropped unexpectedly due to climate-related impacts, causing prices to rise across the region. “Even though new harvests have entered the market after the monsoon, the overall supply has declined internationally,” he said. Bangladesh has stopped exports of raw jute but not jute yarn, he added.

Golchha said the industry has urged the Nepali government to initiate diplomatic efforts with Dhaka to secure raw jute shipments. “If Nepal can ensure a steady supply from Bangladesh, our products can fetch better value in India and the industry will get some relief,” he said.

Bangladesh’s government has stated that raw jute production fell by about 100,000 tonnes this year—from 1.7 million tonnes last year to 1.6 million tonnes—while more than 150 jute mills are operating there, leading to domestic supply shortages. Indian media also report a steady decline in India’s raw jute output, which has dropped by more than 29 percent between fiscal year 2011/12 and 2024/25, according to India’s Ministry of Agriculture and Farmers’ Welfare.

Nepal exported jute products worth more than Rs 8 billion to India last fiscal year, according to the Department of Customs. In the first month of the current fiscal year, Nepal imported 432,000 kilos of raw jute worth Rs 56.5 million from India and 2.4 million kilos worth Rs 285.7 million from Bangladesh.

With both Bangladesh and India—considered global hubs of raw jute production—reporting lower output this year, manufacturers say rising prices and tightening supply have intensified pressure on Nepal’s jute industry.