As the local government has put a stop to opening factories in Lumbini, Buddha's birthplace and one of the world's most important spiritual sites, citing rising pollution, investors are increasingly shifting towards the Bhumahi-Bhairahawa corridor.

The new trade/industrial corridor, where factory construction is booming, lies between Nawalparasi and Bhairahawa districts.

Since the last decade, investors have been eyeing the area due to its proximity to the customs offices of Belahiya in Rupandehi and Maheshpur in Nawalparasi on the Indian border and the wider East-West highway connectivity.

Before that, there was a trend of opening factories in the Bhairahawa-Lumbini area, once a sleepy corner in southern Tarai.

Keshav Bhandari, the central member of the Federation of Nepalese Chambers of Commerce and Industry, said that businesses are attracted to the new industrial corridor as it is easier to import raw materials and export finished goods.

In the last two years, more than three dozen factories have come up in the Bhumahi-Bhairahawa corridor—with an investment totalling over Rs50 billion, Bhandari said.

According to rough data, more than 3,000 unskilled workers have been employed by these factories. Likewise, the number of skilled workers in the new industrial area is around 400.

The establishment of factories by both national and multinational companies has sped up income-generating activities and social development.

There was no industrial area in Nawalparasi West until a few years ago.

Now, the area is known for its industrial corridor.

Satrughan Dhakal, an entrepreneur, has been in the business of diapers and wet wipes for 20 years.

Dhakal, who has experience working with different multinationals, said that the allure of cheap land prices and easy connectivity drew him to set up his factory in the area.

As land prices in Kathmandu, Bhairahawa and Chitwan are exorbitant, Dhakal said he chose Sukrauli, in Ramgram municipality of West Nawalparasi, to set up his factory.

Dhakal is now operating Brijeshwari Industries, which produces baby diapers and wet wipes,

with an investment of Rs1 billion.

“It is an appropriate place to operate factories. The land price is comparatively cheaper here. The Bhairahawa international airport and the East-West highway make it easier to supply goods anywhere,” Dhakal said.

Like Dhakal, other investors have poured in billions of rupees in the area. Some new factories are in the final stages of construction.

Gunanidhi Tiwari, an entrepreneur and immediate-past president of the Federation of Nepalese Chambers of Commerce and Industry in Lumbini province, said that a hassle-free transport network is the key reason for investors to get attracted to the new industrial corridor.

“The road and transport network are the most important factors to operate the factories,” he said.

According to him, it is easy to import raw materials from India and to export the finished goods to India and the third countries. The transport rates are also reasonable, Tiwari said.

“The government should work on this project,” he added.

As West Nawalparasi is situated in the middle of the East-West Highway, it is easy to transport goods to the eastern and western parts of the country as well.

Following the opening of Maheshpur customs as one of the key customs, it has made investors easy to shift their focus in the new area.

The 2015 Nepal blockade, which began on September 23, 2015, and lasted about six months, particularly in Birgunj, which was once the key trade gateway, Bhairahawa got traction as there were fewer protests in the area.

Since then, Bhairahawa has been established as a rival to Birgunj. The opening of the new international airport further increased its importance.

But soon, Bhairahawa customs became saturated and were not able to handle the trade due to the congestion. Then the government upgraded the Maheshpur customs.

The raw materials and equipment imported through Bhairahawa customs get stuck for months at the Sunauli border point, according to traders. But, through Mahespur customs, goods could be exported and imported within a day.

However, the Maheshpur customs points lack robust infrastructure.

Another industrial corridor is under construction in Bardaghat and Sunawal of Lumbini province, but officials say it may take time to be ready.

Industrialists, however, say that haphazard construction of industrial areas would destroy farmlands.

Dhanpat Yadav, mayor of Ramgram Municipality who is also an entrepreneur, said that the local government has facilitated the operation of factories by providing tax waivers in the initial phase of their operation.

“We have introduced an investment-friendly climate here. Our policy is to welcome investors.”

But there are problems for workers. Multinationals like Samsung TV, Warsteiner and Pepsi that have moved to Sukrauli have to depend on Indian and foreign workers.

“It has increased the cost for companies to hire skilled workers from abroad. And it is also difficult to retain them,” said Prakash Yadav, a local entrepreneur.

“Factories here have been announcing vacancies frequently, but skilled manpower is hard to find.”