Ilam advancing in industrialization

ILAM, MAY 20 : Alongside its reputation for tea and agricultural products, Ilam has made significant progress in industrialization. The expansion of industries has accelerated following the construction of more than two dozen hydropower projects in the district. Ilam is also home to one of Nepal’s oldest industries—the Ilam Tea Factory, established in 1920 BS and located in the district headquarters.

With the rise in agricultural production, there has been a corresponding increase in the number of processing industries. Ilam produces a variety of crops including tea, kiwi, oranges, large cardamom, ginger, and dairy products. The district hosts hundreds of tea processing and manufacturing industries. Tea produced in Ilam is consumed across Nepal and exported to India and third countries. The number of processing plants for other agricultural products is also steadily increasing.

According to the Office of Cottage and Small Industries in Ilam, a total of 4,562 industries have been registered in the district. Of these, 2,450 are based on agriculture and forest products, according to Information Officer Kiran Karki. Additionally, 1,309 service-oriented and 467 manufacturing-oriented industries have been registered. The district also has 325 tourism-related businesses, six related to information and communication technology, four energy-based industries, and one in the mining sector.

However, many operating industries in Ilam are not registered with the Cottage and Small Industries Office. Hydropower projects, which fall under the energy-based category, are mostly registered with the Office of the Company Registrar in Kathmandu. Only four such projects are registered locally, although more than 20 hydropower projects are operational on four major rivers in Ilam.

Not all tea industries are registered locally either. The Cottage and Small Industries Office records only 65 registered tea-related industries, while the Office of the Company Registrar shows 1,014 companies registered under Ilam. It is estimated that more than 200 tea industries are currently in operation across the district. Tea is produced in every municipality of Ilam.

Despite Ilam's reputation for high-quality large cardamom, there are no processing industries for it in the district. Most of Nepal's cardamom is exported via India to other countries. Farmers believe they could fetch significantly better prices if local processing facilities were available. At present, they are compelled to sell their cardamom at prices dictated by Indian traders. Known for its medicinal value, cardamom is not only used as a spice but also in the production of perfumes.

According to the Trade and Export Promotion Centre, cardamom worth Rs. 4.15 billion is exported to India annually. In the first three months of the current fiscal year, 783.75 metric tons of cardamom were exported through the Mechi customs point—down 49% compared to the same period last year when a total export amounted to of 1,525.96 metric tons.

Unprocessed ginger and traditional brooms (made from broom grass) are also being exported as raw materials. Goods produced in Ilam are exported through the eastern border points. According to the Mechi Customs Office, cardamom, tea, and ginger worth approximately Rs. 49 billion have been exported.

Over the last five years, the district has exported Rs. 49.5 billion worth of cardamom, tea, and ginger through Mechi customs. Among them, the largest volume—33.76 million kilograms—was cardamom exported to India, generating Rs. 32.02 billion in foreign currency.

In the same period, 62.18 million kilograms of tea were exported, earning Rs. 14.91 billion, while 41.79 million kilograms of ginger were exported, generating Rs. 2.05 billion in foreign income.

According to Agriculture Extension Officer Jivan Thada Magar, Ilam has around 780 hectares of land under kiwi cultivation. Last year alone, 2,852 metric tons of kiwi were produced. Some farmers even use kiwi to make homemade alcoholic beverages.

Although kiwi can be used to make juice, jam, pickles, and other products, the lack of processing industries means farmers are unable to get fair market value. Even during the recently held investment summit in Koshi Province, no concrete proposals were made regarding the processing of Ilam’s agricultural products.