Customs Tightening Boosts Birgunj Market Activity

Raxaul, the Indian border market across from Nepal, is currently quiet.

The market normally busy throughout the year has slowed as the number of Nepali shoppers crossing the border has declined following stricter customs enforcement by the Nepal government.

The government has recently introduced a system of taxing goods worth more than 100 rupees brought from across the border, aimed at discouraging informal imports and improving revenue collection.

With the reduction in cross-border shopping, business activity inside Birgunj has increased, according to local traders.

“The number of customers has gradually increased in shops in Birgunj leading to a lot of improvement in business,” said Jayaprakash Khetan, owner of JP Enterprises, a clothing shop in Ardashnagar, Birgunj.

Similarly, Rishi Keshari, who runs a grocery shop in Mina Bazaar, said customer flow has risen since tighter customs enforcement began.

“Since the tightening of customs regulations began, our business has increased by about 25 percent. If we can stop illegal trade from across the border area, we expect business to increase by 50 percent compared to before,” he said.

After the Division Road Office in Hetauda removed encroached structures along Birgunj’s main road, commercial activity has shifted and expanded in areas such as Ardashnagar and Link Road.

According to the Birgunj Chamber of Commerce and Industry, around 1,000 traders and business operators have been displaced due to road expansion, affecting the livelihoods of nearly 9,000 people directly and indirectly.

Birgunj lies in Nepal’s southern Madhesh Province and serves as the country’s main trade gateway with India, directly connected to Raxaul in India’s Bihar state.

Authorities say tighter border controls are also helping reduce informal imports, illegal money transfers (hundi), and narcotics flow.

Information Officer at Birgunj Customs Office, Uday Singh Bista, said informal imports are gradually declining. “Informal imports from border towns are decreasing to some extent, and we expect it to be easier to control smuggling,” he said.

Birgunj Chamber of Commerce and Industry President Hari Prasad Gautam said the new taxation policy has reduced the number of shoppers traveling from nearby Nepali cities such as Simara, Hetauda, and Chitwan to Raxaul for purchases.

Armed Police Force Nepal’s No. 13 Battalion in Parsa, Superintendent Mohan Bahadur Chhetri, said security deployments along the border are focused on curbing smuggling and illegal cross-border trade.

According to the Birgunj Customs Office, imports through the checkpoint reached approximately $5.22 billion in the first nine months of the current fiscal year. Revenue collection during the same period stood at about $1.34 billion, while exports totaled roughly $0.60 billion.