The opportunity lies not in competing in low-priced traditional jute products, but in shifting towards premium, eco-friendly, and higher-value product segments
The government's recent move to form a committee to examine and propose measures for reviving the long-ailing Biratnagar Jute Mills (BJM) deserves close scrutiny. Between the 1970s and 2000s, Nepal was a major producer of raw jute and exported significant quantities of raw jute and jute products to European markets while also catering to domestic jute industries. At one time Nepal had as many as 11 jute-processing factories. Today, however, there are only six privately-run jute mills in the Sunsari–Morang industrial corridor. However, owing to their inability to produce quality and competitively priced products, coupled with persistent shortages of raw jute, only four mills were operational as of March 2026, with most operating significantly below their installed capacity.
The global scenario of jute industry too is not promising. Scotland's historic jute industries, started decades ago in Dundee based on imported raw jute from Nepal, India, and Bangladesh, are no longer operating. In Ghent, Belgium, once with several jute spinning and weaving mills are all closed or been converted to other uses. European companies now mainly import finished or semi-finished jute products rather than process raw jute domestically.
Government-owned Biratnagar Jute Mills (BJM), equipped with machines mostly installed decades back, was restarted in the past too but was not sustainable due to low performance and outdated capabilities. BJM suffered from high production costs, poor-quality products, and productivity levels far below those of modern jute industries. Given current market dynamics, traditional jute products no longer enjoy assured demand in local and export markets simply because they are made from natural fiber. With only BJM undergoing comprehensive overhaul without revamping and reforming the overall jute sector, the result will likely be no different from the past: low-capacity utilisation, weak market uptake, continued financial losses, and an eventual slide towards closure.
At present, both regional and global markets face a fundamental constraint: traditional jute products simply cannot compete with synthetic alternatives, such as polypropylene (PP) bags and other plastic-based fibers, that are lighter, more durable, less expensive, and more water-resistant. Nepal's manufactured jute products are still concentrated in conventional items – yarn, fabrics, twine, and ropes – whose market scope is restricted, leaving India as the overwhelmingly primary export market.
If Nepal is to revitalise its jute industry, the opportunity lies not in competing in low-priced traditional jute products, but in shifting towards premium, eco-friendly, and higher-value product segments. The industry should focus on sustainable product lines such as reusable shopping bags as alternatives to single-use plastics; food-grade packaging for coffee and cocoa; home décor and furnishings, including rugs, mats, and baskets; decorative and craft products; geotextiles for erosion control and road construction; and jute-based composites for automotive interiors and construction panels. As global efforts to reduce dependence on single-use plastics gain momentum, demand for eco-friendly jute products is likely to remain more resilient and offer greater growth potential than traditional jute products alone.
Jute products continue to be among Nepal's leading manufactured exports to India, although both quantity and value have been declining. Nepal imports some quantity of raw jute, jute yarn, jute fabric from India, with some supplies linked to Bangladesh through regional trade. Nepal's jute industry continues to operate far below its installed capacity because domestic raw jute production meets only a small portion of mill requirements and they are equipped to produce traditional jute products. At present, domestic raw jute supplies cover no more than 25% of the mills' needs, forcing Nepal to import large volumes of raw jute from India and Bangladesh.
As regards increasing raw jute availability, it would mean expanding the acreage under jute cultivation, introducing modern retting technologies, easy access to quality seed, and promoting mechanised harvesting. For Nepal, the greatest long-term value lies in modernising and scaling up the cultivation of high-quality raw jute while simultaneously upgrading all jute mills to produce competitive, high-value, and sustainable product lines. A combined approach – revitalising both raw jute farming and industrial processing – is essential for building a resilient and globally competitive jute sector.
The way forward should begin with a holistic approach encompassing jute cultivation and processing, modernising all private public jute mills, and export trade promotion. Cultivation should be expanded in the eastern region from the current 10,000 hectares to at least 20,000 hectares. This requires a coordinated push to develop high-yield, climate-resilient jute varieties. Together with BJM, existing private mills too should be motivated to install modern machinery/equipment and production infrastructure through policy support and required concessional financing. The jute industry must shift its focus towards value-added jute goods rather than manufacturing traditional jute goods, supported by stronger research systems, extension services, and farmer marketing cooperatives, while reviving the erstwhile National Jute Development Corporation to provide long-term institutional leadership.
Greater public-private collaboration in processing and exports, combined with branding Nepalese jute as a premium eco-friendly fiber, would position the sector competitively in global markets. Looking ahead to Nepal's Vision 2090, the jute sector could, with the proposed policy reforms and targeted investment, expand cultivation to 20,000-25,000 hectares, increase annual production to 35,000-40,000 metric tons, and raise mill utilisation to over 70% of installed capacity. Such growth could generate thousands of rural employment opportunities and position Nepal as a regional hub for high-value, sustainable jute products.
Pandey is a consultant on jute and jute products