**India’s New Import Rules Hamper Nepal’s Steel Exports: An In-Depth Analysis**
*Inspired by the original reporting of The Kathmandu Post via Asia News Network. Additional context provided from Reuters and The Hindu Business Line.*
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### Introduction
Recent changes in India’s import policy targeting Chinese products have unexpectedly stalled steel exports from Nepal to its much larger southern neighbor. While India’s intention was to curb the influx of Chinese manufactured goods, the outcome has simultaneously impacted other countries such as Nepal, which relies heavily on Indian buyers for its steel industry. This article explores the multiple dimensions of this development, including the new Indian guidelines, their effects on Nepal’s steel export sector, the response from both sides, and the broader ramifications for regional trade ties and Nepal’s economy.
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### Overview of the New Indian Import Rule
In May 2024, the Directorate General of Foreign Trade (DGFT) of India issued a fresh notification, revising existing import guidelines for certain steel products. This policy specifically made it mandatory for imported steel to be certified by the Bureau of Indian Standards (BIS). Previously, steel from Nepal enjoyed more relaxed entry conditions due to a trade treaty and geographic proximity. The revised rule, however, directs that:
– All steel consignments coming into India must be accompanied by a BIS certificate.
– The certification process requires on-site inspections and tests at the manufacturing premises by BIS officials.
– Only factories with physical presence in India or those that undergo BIS verifications are permitted to ship compliant products.
While India’s move was mainly targeted at curb dumping by Chinese companies through third countries, the regulation’s blanket application has ensnared Nepalese steel exporters, who lack the resources and scale to rapidly adapt to the stringent BIS standards.
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### Nepal-India Steel Trade: By the Numbers
Nepal’s steel industry has grown steadily over the last decade. While Nepal does not produce iron ore, it imports raw materials, refines, and produces steel bars, rods, and structural steel, exporting substantial quantities to India.
Key facts about the trade include:
– Nepal exported roughly 250,000 to 300,000 metric tons of finished steel products to India annually over the past three years.
– These exports earned Nepal between US$ 200 million and US$ 240 million each year.
– Over 60 percent of Nepal’s steel exports find customers in India, owing to transport convenience and tariff preferences.
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### The Impact on Nepal’s Steel Exporters
With the entry into force of India’s updated rule, Nepal’s steel shipments have virtually halted at the border. The official cessation of exports began early June 2024, causing major disruptions:
– Multiple consignments remain stuck at Indian customs checkpoints waiting for clearance.
– Nepalese exporters, lacking BIS certifications, cannot now send any further shipments.
– Warehouses are filling up as manufacturers are forced to stockpile unsold products.
According to sources at the Nepal Steel Rolling Mills Association:
– Exporters are incurring significant
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