New Delhi, April 23: India's Ministry of External Affairs (MEA) confirmed on Thursday, April 23, that New Delhi is actively engaged with Kathmandu over Nepal's enforcement of customs duty on goods valued above NPR 100 carried by cross-border travellers from Indian markets. The development has triggered significant concern among residents of Nepal's border regions who have historically relied on nearby Indian towns for affordable daily essentials.

What the MEA Said

MEA Spokesperson Randhir Jaiswal, addressing the weekly media briefing in New Delhi, acknowledged that India had taken note of the enforcement drive. He stated, "We've also seen some reports about enforcement by Nepali authorities of a pre-existing provision that outlines collection of customs duty from cross-border travellers in case they carry items purchased in India which have a value of over 100 Nepali rupees."

Jaiswal noted that New Delhi understands Nepal's government introduced this enforcement measure primarily to curb informal trade and smuggling. He also referenced a statement by a senior Nepali official clarifying that civilians carrying personal or household goods would not be obstructed, adding that India "remains engaged on these developments."

Background: A Dormant Rule Now Strictly Enforced

The NPR 100 customs threshold is not a new regulation — it had been on Nepal's books for several years but remained largely unenforced due to the practical challenges faced by residents of border communities. The newly-elected Nepali government's decision to actively implement the rule has now sparked a sharp backlash from local stakeholders and civil society groups.

Nepal's Department of Customs Director Kishor Bartaula explained the rationale to IANS: "Smugglers use ordinary people to bring goods from Indian markets in small quantities multiple times a day without paying duty, and then collect them in large volumes for sale." He acknowledged that the NPR 100 threshold itself contributes little to government revenue but serves as a tool to disrupt organised smuggling networks.

Impact on Border Communities

The enforcement has disproportionately hit low-income households in Nepal's border towns, where Indian markets in towns like Raxaul, Nautanwa, Rupaidiha, and others have long been the primary source of affordable goods ranging from groceries to medicines. For many families, crossing the border for daily purchases is a centuries-old practice deeply embedded in the social and economic fabric of the region.

The Nepal-India Open Border Interaction Group, a prominent civil society organisation, issued an urgent statement on Saturday demanding the immediate repeal of the NPR 100 customs provision. The group argued the rule is both impractical to enforce uniformly and places undue financial burden on border-area residents, calling instead for zero customs duty on household-use goods.

Civil Society Demands and Proposed Alternatives

Beyond repealing the NPR 100 rule, the group put forward a broader set of demands. It called for the establishment of well-managed, affordable markets in Nepal's border areas to reduce dependence on Indian towns for essential commodities. This proposal, if implemented, could stimulate local commerce and reduce the trade imbalance at the grassroots level.

The group also proposed introducing special customs-free facilities for religious and cultural visits, allowing pilgrims and devotees traveling between border towns and major religious sites in both countries to carry goods duty-free for up to 48 hours. The initiative, proponents argue, would boost religious tourism and strengthen people-to-people ties between the two nations.

Broader India-Nepal Relations: Reading Between the Lines

This episode arrives against the backdrop of a historically complex India-Nepal relationship — one marked by deep cultural and economic interdependence on one hand, and periodic friction over trade, borders, and sovereignty on the other. The open border framework between the two countries, governed by the 1950 Treaty of Peace and Friendship, has long facilitated free movement of people and goods, making the sudden enforcement of a dormant duty provision particularly jarring for border communities.

Notably, Nepal's push to formalise cross-border trade also reflects a broader domestic political calculation — the new government in Kathmandu is under pressure to demonstrate fiscal discipline and reduce the country's widening trade deficit with India, which stood at over USD 8 billion in recent years. Critics, however, argue that targeting ordinary border residents rather than organised smuggling syndicates is a policy misfire that burdens the poor while leaving larger networks intact.

India's measured diplomatic response — engaging bilaterally rather than issuing public criticism — signals New Delhi's preference for quiet diplomacy over megaphone pressure, consistent with its broader Neighbourhood First policy. With both governments now engaged, the coming weeks will be critical in determining whether Nepal revises the enforcement threshold or introduces humanitarian exemptions for border residents.