Nepal and India Discussed Easing Steel Trade Barriers
Manufacturers face ongoing duties as both nations seek to align trade policies and market access rules.
Updated on Sept. 20, 2026 in International Trade
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Nepal has formally requested that India remove safeguard duties on steel and anti-dumping charges on jute to recover lost export earnings. The discussions occurred as Nepal faces a significant decline in industrial production capacity tied to these trade measures.
Why it matters
The current trade friction highlights how safeguard duties and anti-dumping measures directly suppress production for cross-border manufacturers. With India as Nepal's largest trading partner, these policy hurdles determine the viability of export-led growth models.
Nepal reported a Rs10 billion loss in export earnings last fiscal year, while Hulas Steel Industries confirmed its factory production capacity has fallen to 20 percent. India currently maintains a 12 percent safeguard duty on steel, with tiered reductions planned for the coming years.
The players
Hulas Steel Industries
A major Nepali steel producer currently managing a significant reduction in factory output due to regulatory and trade barriers.
Directorate General of Trade Remedies
The Indian agency responsible for investigating and enforcing anti-dumping and safeguard measures on imports.
The details
The current duties were imposed in December 2025 after Indian manufacturers claimed that imports were undermining domestic production levels. These charges, coupled with the expiration of critical Indian Bureau of Standards certifications for firms like Hulas Steel, have restricted Nepali access to the Indian market. To move forward, both nations agreed to establish a technical committee within six months to review the existing trade treaty and address these operational bottlenecks.
Timeline
December 2025: India implemented a three-year safeguard duty on selected steel imports.
June 2026: The Indian Bureau of Standards certificate for Hulas Steel expired.
September 17, 2026: The two-day bilateral trade meeting in New Delhi concluded.
Within six months: A technical committee is scheduled to form to review trade treaty terms.
Market Landscape
The push for tariff relief follows the 2025 India-Nepal safeguard duty on steel imports that significantly tightened regional supply chains. This meeting marks a departure from the recent protectionist trend, as both nations attempt to reconcile domestic manufacturing interests with bilateral trade growth.
Operators in the steel and jute sectors should prepare for a six-month negotiation window during which duty levels may remain static. Monitor the upcoming technical committee updates to adjust procurement costs and supply chain routing between Nepal and India.
The takeaway
Trade barriers in the form of safeguard duties can rapidly erode industrial production capacity and export margins. Business leaders should track the technical committee formation as a critical signal for potential tariff normalization in the next fiscal cycle.
Further reading
For broader trends in cross-border commerce, see our coverage of International Trade.
Source note: This article includes information reported by Kathmandupost.
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