JHAPA, March 26: India has blocked the export of plywood from the eastern Kakarbhitta transit point. According to Mechi Chamber of Commerce and Industry (MCCI) President Khem Prasai, 34 Nepali containers loaded with plywood were stopped from crossing into India by the Panitanki Customs Office, Raniganj.
India has suspended the import of Nepali products, citing the lack of Bureau of Indian Standards (BIS) certification.
The Indian Customs Department has implemented a new system requiring Nepali products to obtain BIS certification. As a result, the export of plywood, cement, and other goods has been suspended. The obstruction is not limited to Kakarbhitta but extends to other transit points as well.
Nepal exports plywood worth Rs 500 million in three months
"The containers have been stopped at the border; they are neither allowed to cross nor permitted to return," said Prasai. The containers had headed towards India two weeks ago.
Indian customs authorities have warned that the products will be confiscated if not taken back. The Nepali exporters have already paid GST to the Indian government.
Nepal has 80 plywood industries, and establishing a plywood factory requires an investment of at least Rs 250 million. Plywood entrepreneurs warn that a significant investment is at risk due to the export obstruction, and a large number of workers could lose their jobs.
During the Fiscal Year (FY) 2023/24, Nepal exported plywood worth Rs 7.43 billion to India, compared to Rs 4.70 billion in FY 2022/23 and Rs 350 million in FY 2021/22.
In response to the export obstruction, plywood industries have already reduced operational hours from 24 to eight per day. Nepali industries applied for BIS certification a year ago but have yet to receive approval.