Jogbani trade tops Rs 127bn as India's tariffs threaten Nepal jute
Border trade is up 59% in a quarter, yet India's fourfold duty rise threatens the six surviving mills that employ 15,000 people.
By one measure, the customs yard at Jogbani is having an excellent year. Trade through Nepal's main eastern gateway passed Rs 127bn in the three months to mid-October 2026, the first quarter of the fiscal year 2026/27, compared with Rs 80.42bn in the same stretch of the previous fiscal year, according to the Biratnagar Customs Office. That is growth of about 59%.
Yet the sector that began Nepal's factory age is in trouble. India has raised its anti-dumping duty on finished Nepali jute goods fourfold, from 4% to 16%, and is preparing countervailing duties on top. The question is whether border traffic signals industrial health or masks decline. The figures suggest the second reading deserves attention.
A boom built on inputs
Imports through Jogbani reached Rs 98.26bn, up 67% from Rs 58.76bn. Exports grew 36%, to Rs 29.35bn from Rs 21.66bn. More than 90% of transactions are industrial raw materials and manufactured output.
Source: Biratnagar Customs Office
The mix matters. Crude soybean oil imports rose by about 80% in volume, to 141.1 million litres, and more than doubled in value, to Rs 27.06bn. Raw iron shipments more than tripled to over 93 million kilograms. Steel wire rods, polyethene granules and copper wire also gained, and spending on copper wire climbed to Rs 3.03bn from Rs 1.22bn.
These point to busier factories. But much of the clearance work involves bringing in raw inputs and sending processed goods back out, so higher arrivals need not mean a matching gain in domestic output, jobs or value added. The customs data do not show how fully factories are using their capacity.
Not everything rose. Hot-rolled steel sheet imports fell 44.62%, finished garment imports fell 10.87% and motorcycle imports dropped from 1,900 units to 881. Officials link the garment fall to smuggling driven by tax and tariff gaps, and say the region's motorcycles come mainly through Birgunj, another border hub.
The jute exception
Jute fabric exports through the point climbed to Rs 29.72bn from Rs 16.86bn, and refined soybean oil to Rs 16.08bn from Rs 12.51bn. Yet the headline hides sharp losses. Exports of finished sacks and bags fell by more than 58% in volume, from 4.99 million kilograms to 2.09 million, and earnings slid from Rs 869.2m to Rs 526.5m.
Source: Biratnagar Customs Office
The pattern suggests that fabric, an intermediate product, still finds buyers while finished goods are being squeezed. That fits the direction of the new duty, which targets finished items.
A model with one customer
Nepal's jute mills import raw fibre from India and Bangladesh, process it at home and sell the finished product back across the border. India is their single largest market, so a duty rise strikes at the heart of the business rather than adding a marginal cost.
Only six mills still operate along the Sunsari-Morang Industrial Corridor, down from more than a dozen in past decades. Together they employ about 15,000 workers directly. The industry traces its origin to Biratnagar Jute Mills.
Manufacturers warn that the duties will raise retail prices in India and leave Nepali products uncompetitive. Industry operators also say Bangladeshi jute goods enjoy easier access to the Indian market. The 4% duty was already a strain, they say; at 16% they fear losing the whole market share.
Pressure at home
The squeeze is double. Domestic manufacturers say the government has ended both concessional electricity tariffs and cash subsidies for exports. Appeals by the government and private sector bodies have not yet won relief from India in bilateral talks.
A small economy that processes imported inputs for one large neighbour is exposed to that neighbour's trade policy. Trade totals at Jogbani can climb even as the manufacturing base narrows.
What to watch
Watch whether India formally imposes the countervailing duties, and at what rate. Watch for any bilateral deal on the duties. Look for mill closures or layoffs in Sunsari and Morang, and whether Kathmandu restores export incentives or electricity concessions. Finally, track the next customs quarter: if jute fabric exports hold while finished goods fall, the industry may be shifting toward semi-finished sales, with lower value added.
How this story was made: researched and written by The Standard’s desk with AI assistance, from the published reporting and official data credited below, and checked against those sources. Our standards.
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