Goldstar Shoes, Nepal’s biggest footwear brand, is facing a huge setback. Over 100 trucks full of their shoes are stuck at the border because India refused to issue a crucial certification—the Bureau of Indian Standards (BIS) certificate. Without this, Goldstar can’t export its products to India, which buys about 60% of what they produce. And the situation has been dragging on for almost a month now, with no solution in sight.

But this is more than just a hold-up at the border—it’s affecting jobs, trade relations, and raising some big questions about why this is happening.

What is BIS?

The Bureau of Indian Standards (BIS) is India’s national standards body responsible for developing and enforcing quality and safety standards across various industries. Established to ensure that products sold in India meet specific safety, quality, and environmental criteria, the BIS provides certifications that are mandatory for certain goods to enter the Indian market. This certification process ensures that imported products adhere to Indian standards and regulations. 

What’s Going On?

Goldstar has been exporting shoes to India for decades. They’ve always met the standards, ticked all the boxes, done everything by the book. But now, thanks to stricter enforcement of the BIS certificate, their shipments are stuck, their factory in Bhairahawa is closed, and thousands of workers are out of jobs. And the worst part? There’s been no official word from India explaining why.

This isn’t just about lost sales—Goldstar has already laid off 1,200 workers and might have to cut another 1,000 jobs soon. That’s 2,200 families affected, all right before Dashain, Nepal’s biggest festival. Can you imagine how stressful that must be?

Is This Part of a Bigger Issue?

Now, you might be wondering, why is this happening now? This situation might be part of a larger geopolitical issue. Goldstar sources some of its raw materials from China, and India has been known to block Nepali goods with any Chinese involvement. 

Other countries have had similar problems too. For instance, India recently blocked imports from Bangladesh. But when Bangladesh threatened to take action in return, India quickly reversed its decision. Unfortunately, Nepal’s trade negotiations have been weaker, and that’s left companies like Goldstar in a tough spot.

The Human Impact

For Goldstar, this is not just about lost exports. The company has already laid off a significant number of workers—1,200 to be exact—and is planning to let go of another 1,000. The timing couldn’t be worse, with Dashain, Nepal’s biggest festival, just around the corner. This doesn’t just affect the company; it impacts the workers and their families, who depend on this income, especially during the festival season.

Goldstar has been trying to get help from Nepali ministries and the embassy in New Delhi, but so far, they’ve made little progress in resolving the issue.

Nepal’s Trade Imbalance with India

Goldstar’s troubles highlight a bigger issue—Nepal’s massive trade imbalance with India. In the last fiscal year, Nepal imported goods worth Rs 996.68 billion from India, while its exports to India were only Rs103.17 billion, leading to a staggering trade deficit of Rs 893.50 billion. India is Nepal’s largest trading partner, with over 68% of Nepal’s exports going to India and 62% of its imports coming from there.

Nepal has been slow to adapt its trade strategy, continuing to export traditional goods like zinc sheets, jute, and textiles to India, even as the trade dynamics between the two countries change. This failure to keep up with the times has contributed to Nepal’s growing trade deficit.

What Can Be Done?

Now here’s where things get tricky. Nepal has a chance to raise these issues in an upcoming Inter-Governmental Committee (IGC) meeting between Nepal and India in November, but it’s not going to be easy. In the past, Nepal hasn’t been the strongest negotiator when it comes to trade talks with India, and the frequent changes in the bureaucracy don’t help. Also, without better preparation and a more confident approach, Nepal might struggle to make any real progress.

One idea that’s been floated is for Nepal to hit back by imposing its own standards on Indian goods. After all, if India can block Nepali shoes, why can’t Nepal do the same with Indian products? 

A Wake-Up Call for Nepal’s Trade Policy?

Goldstar’s troubles are just one example of a much bigger issue. Nepal needs to rethink its entire trade strategy, especially with India. The stakes are only going to get higher when Nepal graduates from Least Developed Country (LDC) status in 2026. That’s when the rules are going to get tougher, and trade barriers will get stricter.

And here’s something to keep in mind: when Nepal leaves the LDC list, the current requirement that 30% of an export product’s value must come from Nepal (materials and labor) will drop to 20%. That might sound like a good thing, but it could also mean higher tariffs and tougher trade restrictions for Nepali exports.

Key Numbers at a Glance:

• Nepal’s imports from India (last fiscal year): Rs 996.68 billion
• Nepal’s exports to India: Rs 103.17 billion
• Trade deficit with India: Rs 893.50 billion
• Goldstar Shoe exports to India: 60% of total production
• Workers laid off at Goldstar: 1,200 so far, with 1,000 more layoffs expected

Nepal’s trade strategies clearly need some serious rethinking, and the challenges faced by Goldstar serve as a reminder of just how important strong economic diplomacy can be. Let’s hope that Nepal can step up its game and secure a better future for businesses like Goldstar.