Industries Warn of Raw Material Exports Threatening Domestic Manufacturing, Urge Prime Minister to Intervene

Nepal’s export-oriented industrialists have warned that the uncontrolled export of locally available raw materials to India could seriously threaten the future of domestic manufacturing industries. They have urged the government to take immediate policy measures, arguing that the continued outflow of raw materials is putting Nepal’s value-added industries, particularly the plywood sector, at risk.

The concerns were raised during a meeting with the Prime Minister at Singha Durbar on Friday. A delegation led by Hom Prasad Ghimire, President of the Nepal Plywood Manufacturers’ Association and Chairperson of the Export Committee of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), submitted their concerns regarding the current state of Nepal’s export sector and the challenges facing domestic industries.

The delegation also included the founding president of the Nepal Plywood Manufacturers’ Association, Devananda, along with representatives from the Nepal Carpet Producers’ Association and the Pashmina Producers’ Association.

Speaking to journalists after the meeting, Ghimire said discussions focused on the difficulties facing Nepal’s plywood and carpet industries, as well as broader issues affecting the country’s export sector. He emphasized that a significant volume of Nepal’s locally available forest-based raw materials is being exported to India, creating the risk of severe shortages for domestic plywood manufacturers in the near future.

According to Ghimire, Indian investors have increasingly been establishing small processing units in Nepal primarily to collect locally available raw materials and transport them to India. He warned that this trend is weakening Nepal’s value-added manufacturing industries, as local factories producing finished plywood products may eventually struggle to secure sufficient raw materials.

The industrialists urged the government to introduce policies that discourage the export of unprocessed raw materials while encouraging investment in large-scale domestic manufacturing industries. They argued that processing raw materials within Nepal would generate greater employment opportunities, increase government revenue, and strengthen the country’s export capacity by promoting the export of finished goods instead of raw materials.

Representatives from the carpet and pashmina industries also highlighted their own challenges during the meeting. They called for policy reforms to simplify export procedures, improve international competitiveness, and create a more business-friendly environment for export-oriented industries.

Ghimire said the Prime Minister responded positively to the concerns raised by the business community. He reportedly instructed the concerned government secretaries to immediately address issues that could be resolved administratively, while assuring that legal and policy reforms requiring amendments to existing laws would be pursued in phases.

Although the national budget for the current fiscal year has already been finalized, the Prime Minister assured the delegation that the government would explore practical solutions to curb the excessive export of raw materials, strengthen domestic industries, and promote Nepal’s overall export performance.

Originally scheduled to last between 30 and 45 minutes, the meeting extended for nearly one and a half hours due to the seriousness of the issues discussed. According to the participating industrialists, the Prime Minister’s willingness to listen and his commitment to addressing the concerns left the business community optimistic.

Industry representatives stressed that unless effective measures are introduced to regulate raw material exports and protect domestic manufacturing, Nepal’s industries could face shortages of essential inputs, rising production costs, and declining competitiveness in international markets. They concluded that stronger collaboration between the government and the private sector, along with policies promoting value-added production and export-oriented industrialization, is essential for ensuring sustainable economic growth.