Nepal’s plywood exports fell sharply by 46.78 percent in the first seven months of the current fiscal year, with manufacturers blaming delays by Indian authorities in issuing the Bureau of Indian Standards (BIS) certificate required for shipments to India.

Producers said they had been requesting the certificate renewal for the past five months, halting exports during the period.

According to the Trade and Export Promotion Centre, Nepal exported plywood worth Rs2.69 billion in the review period, compared to Rs5 billion in the same period of the previous fiscal year. Total plywood exports had reached Rs7 billion in the last fiscal year.

“It took five months to obtain the BIS certificate under the annual renewal system. It has been two months since we received the certificate and resumed exporting plywood to India,” said Hom Prasad Ghimire, president of the Nepal Plywood Manufacturers Association.

Around 30 domestic plywood factories received the BIS certification this year.

“If the certificate had been issued on time, we could have already exported plywood worth Rs7–Rs8 billion,” Ghimire said.

In 2020, the Indian government made BIS certification mandatory for several imported goods to align with international quality standards. The move was also aimed at preventing Chinese products from entering the Indian market through neighbouring countries.

Nepali producers say repeated delays in obtaining and renewing the certification have periodically disrupted plywood exports.

During the previous renewal cycle, manufacturers said it took nearly one-and-a-half years to secure the certificate.

Despite such hurdles, exports of Nepali plywood to India have surged in recent years. Nepal exported plywood worth Rs14.65 million to India in the fiscal year 2020-21. The figure jumped to Rs352.28 million in 2021-22 and further rose to Rs2.14 billion in 2022-23.

Manufacturers say demand for Nepali plywood in India has been steadily increasing due to its quality. They also attribute rising demand to declining plywood production in parts of India.

According to industry representatives, plywood production in India has slowed as the government places greater emphasis on agricultural output.

Reports also indicate that the Indian plywood industry has been struggling with rising raw material costs. Prices of poplar and eucalyptus trees—key raw materials for plywood—reached record highs in 2024, putting pressure on mills.

The surge in prices forced some mills in northern India to cut production or shut down operations.

Ghimire said Nepali plywood is primarily exported to Rajasthan, followed by Delhi, Haryana and Punjab, among other Indian markets. Manufacturers say they are now exploring new markets within India.

“We are currently exporting medium-range products. We are exploring markets in Mumbai and Bangalore and planning to export premium-quality products there,” Ghimire said.

Nepal mainly exports finished plywood products, though large volumes of plywood raw materials such as veneer are also shipped to India.

With demand from India rising in recent years, Nepali manufacturers have started commercial cultivation of tree species used in plywood production, including alder (utis), eucalyptus (masala), suar tree and sacred fig (lahare pipal), in both hill and Tarai regions across the country.

These trees typically take seven to eight years to mature.

“Nearly 3,000 hectares of land are now producing trees used for plywood. Many factory owners have also started commercial plantations,” Ghimire said, adding that he himself operates tree plantations on more than 15 bighas of land.

According to the association, around 80 plywood factories are currently operating in Nepal. Of them, about 50 export their products to India while the rest supply the domestic market.

The industry has attracted an estimated Rs40 billion in investment and employs around 25,000 workers. Most factories are located in the Tarai region.

The number of plywood factories has also been increasing, with several large facilities recently coming into operation, the association said.

Plywood exported to India is produced using about 80 percent domestically sourced raw materials, while the remaining 20 percent is imported.

Industry insiders say Nepal has the potential to export plywood worth Rs30 billion to Rs40 billion within the next two to three years if delays in issuing BIS certification are resolved.

India remains Nepal’s largest export destination. Nepal exported goods worth Rs224.68 billion to India in the last fiscal year, which ended in mid-July.