**India’s New Import Policy Hampers Nepal’s Steel Exports: Regional Economic Ramifications**
*Based on reporting by Abhaya Raj Joshi for Asia News Network, with additional information from other credible sources.*
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India, historically one of Nepal’s largest trade partners, has enacted a new import registration rule aimed, in large part, at curbing Chinese steel imports. However, this policy shift has swept up steel exporters from Nepal and other neighboring countries, resulting in stalled shipments and raising tensions among various stakeholders in South Asia.
### Background to India’s Import Policy Change
India introduced a revised import policy for specific steel products, now mandating pre-registration in the Steel Import Monitoring System (SIMS) before these products can clear customs. This requirement, rolled out in April 2024, explicitly targets a range of flat steel products, including hot-rolled, cold-rolled, and galvanized steel sheets.
**Primary Objectives of the Policy:**
– Control the influx of Chinese steel, which Indian authorities believe threatens domestic producers due to its lower price and alleged dumping practices.
– Enhance the government’s ability to monitor and collect trade data for strategic planning.
– Preemptively address imbalances in the domestic steel market and support Indian manufacturers.
### Unintended Consequences for Nepal
Nepal’s steel industry, which has grown considerably in the last two decades, now faces severe repercussions from this new restriction. The country used to export about 150,000 tons of flat steel primarily to India annually, with factories located in areas from Birgunj to Bhairahawa and Sunsari.
Nepal’s steel exports mainly comprise hot-rolled, cold-rolled, and galvanized steel coils and sheets produced by a small but significant manufacturing sector employing thousands of workers.
**Key Points of Impact:**
– Over 2,000 cargo trucks carrying steel products from Nepal have been stranded at border points as of early June 2024, unable to complete customs clearance.
– Nepali exporters were unaware of the new requirement and did not have the chance to register shipments in the SIMS before the policy’s enactment.
– Each day of delay leads to rising demurrage costs, straining already tight margins and threatening relationships with Indian buyers.
### Nepal’s Response and Diplomatic Outreach
Nepal’s Ministry of Industry, Commerce, and Supplies, as well as steel manufacturers’ associations, have sought clarification and intervention from India’s Ministry of Commerce. They are requesting that:
– Steel products shipped before the new rule’s implementation be allowed entry under previous requirements.
– Small-scale and least-developed country exporters such as Nepal be exempted from the new requirement, at least temporarily.
Nepali officials argue that:
– Nepalese steel can be easily distinguished from Chinese steel by its unique packaging, documentation, and trade certificates provided by Nepalese authorities.
– The policy, while not aimed at Nepal, unfairly lumps together all regional exporters facing a different competitive landscape than China.
Diplomatic sources indicate ongoing negotiation, but
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