Business activities in the industrial hub of Biratnagar in south-eastern Nepal have started to slow down after Madhes-based parties warned of launching another round of agitation.

Industry and trade are still trying to recover from a prolonged banda organized by Madhesi parties at the beginning of the fiscal year which was followed by a trade blockade by India lasting for four and a half months.

The business community fears that another cycle of unrest will wreak havoc on the economy left in tatters by the embargo just as they were beginning to feel some relief.

Traders have stopped placing or receiving orders that cannot be fulfilled within two weeks, and factories have started to cut production.

Likewise, shipments through the Biratnagar-Jogbani border point have shrunk amid rumours of an imminent banda. The number of goods-laden trucks entering Nepal through the customs point has gone down.

Rajendra Dhungana, a customs officer at Biratnagar Customs Office, said revenue collection had dropped to Rs60 million daily from last week, down from Rs70-80 million previously. Imports of merchandise and motor vehicles have decreased significantly, according to him.

Nandu Jaju, president of the Textile Traders Association, said that orders for textiles had fallen 30 percent in the market due to banda fears. “We don’t want to invest money on something that cannot be sold within a week as there is no situation where we can maintain stocks in anticipation of future sales,” he added.

Likewise, Pawan Sarada, president of the Merchant Association of Nepal, said traders and industrialists had been living in fear as rumours were rife of another prolonged agitation.

“Materials required for development activities are imported in large quantities at this time, but traders have been holding back,” he said. “Development activities might be affected if the necessary materials cannot be supplied.” Many goods which should have been imported last September arrived only last month.

Industrial production has also been hit. Sarada, who is also a lawmaker, complained that industrialists had been forced to cut output due to the rumours at a time when they were struggling to operate in a full-fledged manner.

There are 500 factories operating in the Sunsari-Morang Industrial Corridor. Former president of the Merchant Association Morang Abinash Bohora said the business community was in a dilemma whether to make additional investments amid the uncertainty.