13th October 2024, Kathmandu
Nepal’s leading footwear brand, Goldstar Shoes, has been hit hard as it shuts down operations, leaving 1,200 employees jobless just before Dashain, Nepal’s biggest festival. This shocking turn of events is not entirely Goldstar’s fault—there’s a much bigger issue at play.
Nepal’s Footwear Industry Hit
Why Did Goldstar Close Down?
The closure is directly linked to an unexpected crisis at the Nepal-India border. Over 100 trucks carrying Goldstar’s shoes have been stranded at the Indian border for nearly a month. The reason? India’s refusal to issue the Bureau of Indian Standards (BIS) certification, a vital approval required for exports into India.
The BIS is India’s national standards body, which ensures that products meet the country’s stringent quality and safety standards before they are imported. This certification is essential for certain goods, including footwear, to enter the Indian market. Without the BIS certification, Goldstar Shoes cannot legally sell their products in India—a market that accounts for 60% of their total sales.
The Impact: 2,200 Jobs on the Line
As a result of this certification issue, Goldstar has been forced to halt production and lay off 1,200 workers. Another 1,000 jobs are hanging by a thread if the situation doesn’t improve soon. This is not just about a business losing profits—it’s about families losing their livelihoods right before the most significant festival in Nepal. The ripple effects on Nepal’s economy and trade relations with India are also concerning.
Nepal’s Trade Imbalance with India Worsens
This crisis highlights a larger issue—Nepal’s growing trade imbalance with India. With the majority of Nepal’s exports relying on access to the Indian market, any disruption can have devastating consequences. Goldstar’s situation is a clear example of how bureaucratic hurdles like the BIS certification can severely impact Nepalese businesses.
What Needs to Be Done?
Nepal urgently needs to adopt a smarter trade strategy and take stronger action to protect its industries. This could involve:
Strengthening diplomatic efforts to resolve the BIS certification issue with India.
Negotiating better trade terms to prevent similar crises in the future.
Diversifying export markets to reduce dependence on any single country, especially India.
The future of 2,200 workers and the stability of Nepal’s trade relations are at stake. Now more than ever, Nepal needs to reassess its approach to international trade and ensure that local industries like Goldstar Shoes can thrive.
Conclusion
Goldstar Shoes’ predicament is a stark reminder of how external factors like regulatory standards can drastically affect businesses. With 1,200 layoffs already made and 1,000 more jobs at risk, the situation demands immediate attention. Nepal must work to secure the future of its industries and safeguard jobs, especially in the face of such unexpected challenges.
What do you think should be done to resolve this situation? Share your thoughts below.
Source: Nepal’s Footwear Industry Hit
