Nepal suspends milk imports amid Indian pressure: BIS certification halted

KATHMANDU: The Nepalese government has suspended the import of milk and dairy products, a move that has prompted informal pressure from India to reopen imports. This suspension has resulted in India halting the issuance and renewal of the Bureau of Indian Standards (BIS) certification, which is crucial for various Nepali exports, including cement, footwear, and plywood.

The decision to suspend dairy imports was made in response to a significant surplus of powdered milk and butter in Nepal. The Ministry of Agriculture and Livestock Development announced the ban in February 2024, following recommendations from the Dairy Development Corporation (DDC) and other stakeholders. The move aims to protect local farmers from losses and ensure that they receive payments for their products.

India’s Reaction to the Import Ban
The halt in imports has led to dissatisfaction from India, which relies on the import of Nepali cement and other products. According to officials from Nepal’s Ministry of Industry, Commerce, and Supplies, India has suspended the BIS certification process without providing a clear rationale. The lack of certification poses a significant challenge for Nepali exporters, especially in the cement sector, which has made strides toward self-sufficiency.

“With India not renewing BIS certificates, our cement exports are facing severe challenges,” stated an industry official. “Last fiscal year, we exported NPR 3.85 billion worth of clinker and cement to India, but now we are at a standstill.”

Impacts on Various Industries
Several industries are feeling the effects of the Indian decision, particularly cement and footwear manufacturers. Rudra Nyaupane, president of the Nepal Footwear Manufacturers Association, explained that the inability to obtain BIS certification has halted exports to India entirely. “Without this certification, our products cannot enter the Indian market,” he said.

The suspension has also affected Nepal’s ability to import dairy products. The Ministry of Agriculture stated that it would not issue any import permits for dairy until the situation is resolved. “This decision was made to address the backlog of powdered milk and ensure farmers get paid,” said a spokesperson from the ministry.

Government’s Commitment to Local Farmers
Nepal’s government has emphasized that the suspension of dairy imports is primarily aimed at protecting local farmers. The decision has led to the sale of surplus milk and butter, allowing dairy producers to settle dues with farmers. “By suspending imports, we are ensuring that farmers are compensated for their products,” said an official from the Ministry of Agriculture.

However, the tension between Nepal and India raises questions about trade relations, especially given India’s significant role in Nepal’s economy. The country has been a primary source of dairy imports, with companies like Amul dominating the market.

Future Prospects and Trade Relations
As both countries navigate this delicate situation, the future of trade relations remains uncertain. While the Nepalese government is focused on supporting local agriculture and ensuring food security, the halt in BIS certification could strain exports to India, a key trade partner.

Industry experts are urging the government to engage in dialogue with Indian authorities to resolve the certification issue and explore potential compromises. “It’s crucial to find a balance between supporting our farmers and maintaining healthy trade relations with India,” said a trade analyst.

In conclusion, while the suspension of dairy imports aims to protect local farmers, it has also led to significant trade challenges with India. As the situation unfolds, both governments will need to work together to ensure that the economic interests of both countries are addressed.