Banking Khabar / Industries in Nepal’s Rupandehi district are facing a looming shutdown as global supply disruptions triggered by the ongoing Middle East conflict ripple through the local economy. Officials at the Bhairahawa Customs Office have confirmed that imports of critical raw materials, particularly iron and plastic, have already been affected, an early warning sign of deeper trouble ahead for the industrial sector.
Business leaders say the impact of rising geopolitical tensions involving the United States, Israel, and Iran is being felt sharply. Escalating fuel prices, surging raw material costs, higher transportation charges, and increased insurance and administrative expenses have thrown industrial cost structures into disarray. “The situation is becoming unsustainable,” said Krishna Prasad Parajuli, president of the Rupandehi Industrial Association. “Some raw materials used in plastic manufacturing have doubled in price.” Plastic granules, once available at $900 per ton, now cost as much as $1,500, he noted.
In an official statement, the association warned that industries across the country are at growing risk of shutdown due to abnormal price hikes in global markets. Many factories have already scaled back production, with some nearing partial closure. The crisis has been worsened by supply chain disruptions. According to Upendra Agrawal, president of the Butwal Industrial Area Industry Association, Indian suppliers have stopped accepting orders from Nepali businesses. Alternative sourcing from countries like South Korea or Vietnam remains impractical due to high shipping costs and long delivery times.
The industrial corridor spanning Rupandehi, Bhairahawa, and Butwal home to investments worth an estimated NPR 20–25 billion and employing over 5,000 workers, is particularly vulnerable. Entrepreneurs warn that the situation is rapidly deteriorating. Khim Narayan Parajuli, who operates a plastic manufacturing business, said even pre-paid shipments secured through Letters of Credit are being withheld by suppliers. “If raw materials don’t arrive within a week, many factories will be forced to shut down,” he cautioned.
Across Lumbini Province, around 252 plastic industries are currently in operation many now at risk. Industry representatives are urging immediate government intervention. Proposed measures include import concessions on raw materials, control of transportation costs, lower bank interest rates, and financial relief packages. Temporary reductions in electricity tariffs and service fees have also been suggested.
“There is an urgent need for action,” said Suman Bashyal, general secretary of the Rupandehi Industrial Association. “Without support, the consequences will extend beyond factories.” Experts warn that continued production cuts could trigger widespread job losses and disrupt supply chains, logistics, banking, and the broader economy. The association has also called for stronger market monitoring to curb price manipulation and stabilize supply.
With industries forming the backbone of the national economy, stakeholders fear that widespread closures could lead to declining government revenue, rising unemployment, and a broader economic slowdown.
