Kathmandu, Oct. 12: The jute industries in the country have urged the government for diplomatic measures to ensure seamless entry of Nepali products to the Indian markets.
They also demanded full implementation of the directives for the use of domestic goods in public offices, and use of jute bags instead of polythene.
Stating that Nepali jute has lost almost 95 per cent of its market share in India after the latter imposed anti-dumping duties. According to the entrepreneurs, India is also considering imposing counter-veiling duties as well.
On 29 September 2025, India’s Directorate General of Trade Remedies (DGTR) initiated an investigation into countervailing duties on jute products imported from Nepal and Bangladesh. Last month, the DGTR published its final findings, recommending the imposition of countervailing duties on some Nepali jute producers.
“This puts the jute industries in a critical situation. They have already invested in product diversification and modern machinery. The government should rescue us from this current crisis with priority,” said Somnath Adhikari, General Secretary of the Nepal Jute Mills Association (NJMA).
He said that the government should hold a high-level talks with India to bail the industries out of the current crisis. As the government is preparing for the visit of Prime Minister Balendra Shah to India, a delegation of industrialists from Biratnagar submitted a memorandum to the government last week which also includes the challenges faced by the jute industries.
According to the memorandum, this issue must not be confined to correspondence between government ministries. A high-level political and diplomatic solution must be sought. “High-level dialogue should be held with India, the issue should be raised through Nepal–India trade mechanisms, and discussions should also take place between the private sectors of both countries,” it said.
“The jute industry had given Biratnagar its identity as an industrial city. Today, however, seven jute mills are at risk of closure. The industry directly supports around 15,000 jobs,” said the delegation.
India itself is a major producer and consumer of jute. According to Indian government statistics, India produced 1.28 million tonnes of jute products in the Fiscal Year 2025/26 and consumed 1.205 million tonnes in its domestic market. The country’s organised jute industry directly employs around 370,000 people, while approximately 4 million farming families are involved in jute cultivation.
“As the jute industry is directly linked to local farmers, there is a need to further promote jute cultivation. Being an environmentally friendly and organic product, jute has considerable potential for the future. We must honestly ask whether India’s move is simply a trade protection measure intended to safeguard its own industry and farmers,” read the memorandum submitted by the Biratnagar-based entrepreneurs to the federal government.
They argued that while it is natural for India to protect the interests of its industries and jobs, Nepal also has the right to protect its 15,000 jobs, its exports and its domestic industry. About 75,000 farmer families in Jhapa, Morang and Sunsari are involved in jute farming, said Adhikari.
Nepali jute industries are wholly dependent on Indian market as 96 per cent of the total product is exported there. Most of the raw materials also come from India. Nepali raw materials cover less than one-third of the total demand.
Meanwhile, speaking at a programme on the state of jute industry in Biratnagar a couple of days ago, Jute industry operator Champalal Rathi said India and Bangladesh provided government protection and incentives to their jute industries, so Nepal should also introduce the necessary policy support to maintain the competitiveness of its domestic industry.
Likewise, NJMA President Raj Kumar Golchha said that if the problem prolonged, there wouldn’t be any alternative other than shutting down the industries.
The industrialists suggested the government to implement policy to promote the use of jute products in packaging food and other items. Although such policy is announced, it's not strictly implemented.
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