Sanjay Mandal, president of the Morang Chapter of Nepal Retailers Association, is worried by the declining number of festival shoppers in Biratnagar over the years.

Dashain, this year, began last Thursday, October 3. But, most of the shops in the capital of Kosi Province wear a deserted look. 

But, the scene some seven kilometres South on the Indian side of the border is different. 

The Jogbani market is bustling with crowds. Shopkeepers are totally occupied, some attending to over 100 customers. 

First time visitors to Jogbani can find it surprising to listen to customers bargaining with the traders for discounts in Nepali language. However, the market, located in the Araria District of Bihar State in India, has been a go place for residents of eastern Nepal not only during the festival season, but for around the year for decades. 

And, in recent years, Jogbani has garnered the attention of Nepalis living in the hilly areas of Kosi Province as well. People from Jhapa, Morang, Sunsari, Dhankuta, Bhojpur, Tehrathum, and Sankhuwasabha have throng to Jogbani to get their festival goods this Dashian.

There are several reasons for Nepali customers to prefer Jogbani over Biratnagar. And the most important one is the cheaper price of goods.

To take an example, customers in Jogbani can get sugar at Rs 65 per kg, which costs around Rs 90 per kg in Biratnagar.

Meanwhile the sweetener costs around Rs 115 per kg in Kathmandu.

Though customers in Biratnagar can get sugar at the Bhatbhateni Super Market at Rs 85 per kg, they can only buy 2 kg at once. In Jogbani, however, a customer can normally buy up to 5 kg at once for domestic use.  

Sugar is one of the most illegally imported commodities in Nepal. The country’s annual sugar consumption is 300,000 tonnes, while the total production capacity is only 80,000 to 100,000 tonnes. Traders claim that the gap is fulfilled through smuggling.

Mandal from the retailers association adds that the high customs rates on the import of goods has made them more expensive on the Nepal side of the border, which has given rise to smuggling through the open border.

According to Mandal, clothes such as Sarees and Kurta Shalwal are levied up to 40 percent customs duties. And a sack of rice costs Rs 500 less in Jogbani.

Nepal shares an open border on its Eastern, Southern and Western fronts with India.

“The failure of authorities to investigate and take proper action against smuggling has made the Nepali market more expensive,” said Mandal. “Appropriate changes in customs rates are a must if the government wants markets on the Nepali side of the border to survive.”

Businesses might have to shut down their shutters if this dire situation continues, Mandal added.

Anupam Rathi, president of the Morang Merchants Association, also blames the government's policies for declining customers in border markets of Nepal.

“It is natural for customers to prefer markets where goods are available at cheaper rates,” Rathi said. “The high custom duties on daily consumer items have further exacerbated the issue, prompting more Nepali shoppers to cross the border.”

Nepali traders in the area claim that consumer goods worth over Rs 50 million enter Nepal daily from Jogbani without interruption. People can easily transport five kg of sugar, tea leaves, mustard oil, soap, cumin, and other kitchen essentials across the border, they say. 

A customs officer told the New Business Age on condition of anonymity that it was practically impossible to stop Nepali people from buying daily essentials in Jogbani. 

Parshuram Timsina, Manager of Bhatbhateni Supermarket in Biratnagar, said the business this festival season has failed to meet the expectation.

“We have not been able to achieve the daily turnover target of Rs 5 million yet,” said Timsina, echoing Mandal and Rathi regarding the preference of customers for Jogbani.

The local businesses claim that no significant trade of food, clothes and kitchen goods has happened in Biratnagar this Dashain. 

Nanda Kumar Jaju, Vice President of the Biratnagar Textile Merchants' Association, claimed that Nepali customers have started flocking to Jogbani even to buy a metre of cloth as the high customs and other duties have made them expensive in Biratnagar.

Anshu Banjara, Chairman of the Birat Merchant Association, believes the government needs to take steps to raise awareness among consumers, claiming that many Nepalis get cheated in the border markets on the Indian side of the border.

Government also needs to reform its policies by analysing domestic demand and consumption data.

Traders in Biratnagar claim they have repeatedly urged the government to curb the unauthorised import of goods and adjust the import duties accordingly.  But, the government might be in collusion with smugglers, they say.