The once-famous market for betel nuts, known as the “Supari Line”, in the border town of Kakarbhitta was renamed “Suryodaya Marg” years ago.

This change does not signal that the betel nut trade has diminished—it only has flourished. In the past, the small intersection in Kakarbhitta was crowded with Indian traders and buyers for locally produced betel nuts. That’s how the area earned the name “Supari Line” in the first place.

As business grew, the demand for betel nuts has increased, local traders say. And Supari Line wasn’t just a business street—it represents history, right from the late 1980s.

The economic liberalisation brought about by Nepal’s political changes in 1990 opened the economy to Southeast Asian markets.

Betel nuts began to be imported from countries like Indonesia, Malaysia, Thailand, and Singapore. The tiny marketplace in Kakarbhitta became the hub.

“For as long as I can remember, betel nut trading has happened here,” says Ganesh Basnet, a local. “Back then, it was done openly. Nowadays, it’s an opaque affair.”

Nepal Police seized nearly 9,500 kg of betel nuts in a single operation on the midnight of February 3, 2012.

Although the official report claimed the seizure happened on the Mechi river, it was a raid on a trader’s warehouse. That incident opened the eyes of many: the betel nut trade wasn’t as straightforward as it seemed—it was an organised, longstanding trade operating in a legal grey area.

Under the 1999 Nepal-India Trade and Transit Treaty, goods imported by Nepal from third countries cannot be re-exported to India without value addition.

Betel nuts fall into this category.

Nepal imports them from Southeast Asia, but they are not consumed domestically—they are smuggled into India.

“Based on the treaty, re-exporting such goods to India is illegal,” says a customs official. “But in practice, this trade has been running for decades.”

Despite frequent raids by law enforcement under public pressure, the business networks of these traders are so strong that such actions result only in temporary caution. Political protection, bureaucratic involvement, and geopolitics often help sustain the trade.

“With the open border between Nepal and India, stopping such activities is very difficult,” says a former senior police officer in Koshi Province.

“Still, the security forces try their best to prevent illegal activities.”

While the government’s capacity to halt smuggling is weak, it appears the same government is indirectly legitimising the trade. Recently, the government approved imports of around 11,500 tonnes of betel nuts for 12 different industries across the country.

Customs chief Umesh Shrestha confirmed that the first consignment has already arrived through the Biratnagar customs office.

“Government quota imports have begun,” Shrestha says.

Each kilo of imported betel nut is subject to Rs100 customs duty, Rs100 excise duty, a 1.5 percent additional income tax, and 13 percent VAT.

While this tax structure may seem like a good way to increase revenue, the absolute risk is that these same imported betel nuts would be smuggled into India, which would clearly violate the 1999 trade treaty.

Despite several crackdowns in past years, the illegal flow of betel nuts to India has never stopped.

“Even when industries import betel nuts, their end use isn’t monitored,” says another customs official.

“That loophole supports the illegal re-export to India.”

Jhapa, Morang and the lower belt of Ilam are Nepal's main districts producing betel nuts.

Production has been rising every year, but so has farmer frustration.

While the government facilitates large imports for industries, local farmers say the betel nuts grown in their orchards are rotting without buyers.

According to the Agriculture Knowledge Centre in Jhapa, 2,770 hectares of land in Jhapa host betel nut trees, yielding 10,412 tonnes.

Morang has 902 hectares, yielding 2,949 tonnes, and Ilam has 266 hectares producing 705 tonnes.

Despite this, the harvest has little to no access to markets.

Bimal Bhattarai, a farmer from Arjundhara, said, “Last year, all our betel nuts rotted without being sold.”

This year, a few traders have purchased some, but it remains irregular.

Nepali betel nuts fetch lower prices, are considered different in quality from Indian ones, and lack processing facilities. Due to all these factors, they struggle to reach the market.

Meanwhile, the government is encouraging the import of foreign betel nuts and their indirect re-export to India.

Rudra Paudel, a farmer from Mechinagar, questions, “When the country produces enough, why do we need to import foreign betel nuts?”

He said a bulk purchase of the output from the three districts could help domestic producers. But traders don’t want that. Instead, they put Nepali ‘tags’ on imported betel nuts and smuggle them to India.

Processing centres in Mechinagar, Shantinagar, Budhabare, Arjundhara, and Bahundangi are still operating. Raw betel nuts are boiled, peeled, dried, and prepared for export. Yet, farmers are worried as exports remain stagnant.

Though the processing offers some employment, it doesn’t solve the farmers’ main problem. “If imports from third countries stopped, all the backdoor dealings would end. Then Nepali betel nuts could find a market,” says Manorath Tiwari, a farmer from Budhabare-9.

The southern regions of Jhapa, Morang, and Ilam are green with betel nut orchards — but farmers’ faces show not joy but anxiety. The clusters of betel nuts hanging in their groves are still unripe, but the market has already dried up, all due to foreign imports.

Farmers' anger has surged since the government approved imports of 11,500 tonnes from Singapore, Malaysia, and Indonesia.

“Our produce is rotting at home while the government brings in foreign betel nuts and ruins us,” said Ramchandra Timilsina of Mechinagar. “How long will this anti-farmer policy continue?”

The farmers’ betel nuts don’t sell. Meanwhile, cheaper imports from Malaysia, Thailand, and Indonesia are rebranded as ‘local’ and sent to India. Smugglers and mafias are interested in the profits, while the farmers try to figure out how to sell their produce.

Farmers urge the government to stop imports and promote local production every year. But their pleas go ignored.

“When it’s time to protect local production and ban imports, the government does the opposite and imports even more, harming domestic farmers,” said Nilkantha Tiwari, a farmer from Bahundangi, Jhapa. “No matter which government comes, the problem of betel nut farmers remains the same.”