Nepali steel manufacturers, including major producers like Panchakanya Group and Vistaar Global, have been unable to export their stainless steel products to India since June 16 due to new Indian regulatory requirements.
The disruption stems from India's updated quality control policy mandating Bureau of Indian Standards (BIS) certification not only for finished products but also for raw materials used in manufacturing steel goods. This marks a significant policy shift, as previous BIS requirements applied mainly to goods such as sanitary pads, plywood, footwear, and cement.
Panchakanya Group, which has been exporting stainless steel tanks to India for nine years and operating from Bhairahawa’s Special Economic Zone (SEZ) for the last four years, is one of the most affected. According to Devendra Sahu, the company's general manager, exports that once amounted to Rs 20 million annually have come to a complete halt due to the new BIS standards and procedural changes under India’s Steel Import Monitoring System (SIMS).
One of the critical procedural barriers is that Nepal has been excluded from the list of countries eligible for registration on India’s SIMS online portal, effectively preventing Nepali exporters from filing necessary documentation. Bhairahawa Customs Chief Ram Prasad Regmi confirmed that steel utensil exports have been stagnant for two months.
Raw Material Certification Compulsory
Previously, exports were allowed based on value addition thresholds (typically over 30%) and documents like the Certificate of Origin. Now, BIS certification is required even for raw materials used in production, raising barriers for companies using imported inputs, particularly from China.
Steel utensil manufacturers suggest that India’s move may be aimed at curbing Chinese raw materials from entering Indian markets via Nepal. Sahu noted that their Indian partners indicated concerns about the high volume of China-origin products being re-exported from Nepal.
Bhairahawa SEZ Deputy Director Sabut Dumre echoed the same, saying that the policy appears targeted at monitoring imports of Chinese raw materials, which may have been rerouted through Nepal amid India’s stricter domestic regulations on Chinese goods.
Industry-wide Impact
The regulatory changes have affected multiple steel-related exporters in Nepal. Vistaar Global, an India-invested firm in the Bhairahawa SEZ employing over 400 workers, has not been able to dispatch products for the past two months. Arvind Tripathi, the company’s accounts officer, said 90% of their production was previously exported to India. Goods are now stockpiled in warehouses due to the export blockade.
Similarly, Hulas Steel in Biratnagar reported halted exports of gabion wire mesh due to lack of BIS certification. In contrast, companies like Premier Steel, which use BIS-certified raw materials from India, report no disruption.
Government Response and Diplomatic Outreach
Nepal’s Ministry of Industry, Commerce, and Supplies has formally raised the issue with Indian authorities via the Ministry of Foreign Affairs. Under Secretary Tarka Raj Bhatta confirmed that Nepal has requested India to reinstate Nepal’s name in the SIMS system under "Country of Origin" to resume normal trade operations. However, no official response from the Indian side has been received so far.
While some Indian-invested steel manufacturers in Nepal reportedly plan to localize production to meet Indian requirements, the broader concern remains whether these regulatory shifts constitute a form of non-tariff barrier affecting cross-border trade.
With no immediate resolution in sight and growing warehouse stockpiles, Nepali steel exporters face mounting operational and financial pressure. Industry stakeholders warn that unless the issue is addressed diplomatically and administratively, Nepal’s export-dependent manufacturing sector could face prolonged setbacks.
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