Nepal and India Discussed Trade Barrier Removal
Officials met in New Delhi to address safeguard duties on steel and access for agricultural goods.
Updated on Sept. 20, 2026 in International Trade
Live Poll
Do you believe trade restrictions on imports are necessary to protect a nation's domestic industries?
Nepal requested that India remove trade barriers on jute and steel products to recover from a loss of over Rs10 billion in export earnings. Simultaneously, India asked Nepal to improve market access for its agricultural and dairy products.
Why it matters
India is Nepal's largest trading partner, accounting for more than 60 percent of its total trade, making the resolution of these barriers critical to the economic health of both nations. The current safeguard duties were imposed after Indian manufacturers argued that imports were harming domestic production.
Nepal's iron and steel exports fell to Rs6.14 billion last year from Rs16.35 billion, while India's current steel safeguard duty stands at 12 percent. Hulas Steel Industries has reported that its factory production capacity is currently reduced to 20 percent.
The players
Hulas Steel Industries
This is a major manufacturing firm in Nepal that has reported significant reductions in production capacity due to trade barriers.
Directorate General of Trade Remedies
This Indian government agency is responsible for investigating and recommending trade measures, including anti-dumping and safeguard duties.
The details
During a two-day trade meeting in New Delhi, the Indian delegation requested that Nepal provide all relevant information for review by the Directorate General of Trade Remedies. Both nations agreed to form a technical committee within six months to conduct a comprehensive review of the current trade treaty.
Timeline
December 2025: India imposed 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 trade meeting in New Delhi concluded.
Within six months: A technical committee will be formed to review the trade treaty.
Market Dynamics
The current negotiations follow the implementation of the Indian safeguard duty on steel, which has constrained cross-border manufacturing output. This meeting reflects a broader pattern of nations managing post-pandemic trade deficits through selective protective measures.
The ongoing trade friction may impact regional industrial stocks and the cost of raw materials for construction firms relying on cross-border supply chains. Retail investors should monitor the technical committee's progress for potential shifts in trade policy that could influence regional manufacturing margins.
The takeaway
The formation of a technical committee indicates a commitment to resolving bilateral trade tensions through diplomatic channels rather than unilateral measures. Both nations remain dependent on each other for core economic growth, necessitating a balance between domestic industry protection and export market access.
What happens next
A technical committee will be established within six months to formally review the existing bilateral trade treaty between the two nations.
Further reading
Learn more about global commerce trends in the International Trade section.
Source note: This article includes information reported by Kathmandupost.
Live Poll
Do you believe trade restrictions on imports are necessary to protect a nation's domestic industries?
