Chinese walnuts and Canadian peas reach India through Nepal, squeezing local growers

Price gap drives an illicit route

Chinese walnuts and Canadian peas are being smuggled into India through Nepal, according to reports from areas along the India-Nepal border. The trade is exploiting a large difference between the prices of imported Chinese walnuts and walnuts produced in Jammu and Kashmir, while bypassing the duties, inspections and documentation required in formal import channels.

Walnuts from Jammu and Kashmir are selling for ₹700-800 per kilogram, compared with ₹350-400 per kilogram for Chinese walnuts reaching the market through Nepal. The Chinese product is therefore available at roughly half the price of the domestic crop. The gap has alarmed walnut traders and threatens the position of Indian growers in a market where buyers can switch quickly to cheaper supplies.

Nepal serves as the transit corridor

Amar Ujala reported that operators in Maharajganj, an Indian district bordering Nepal, are profiting from the movement of Chinese walnuts and Canadian peas. The publication said the margin on Chinese walnuts can reach twice the traders’ cost. The available reports do not provide a total volume for the current flow, making it difficult to measure the trade’s national scale or its precise effect on wholesale prices.

The route nevertheless has a documented history. In an earlier report dated 16 February 2020, Amar Ujala said police and border personnel intercepted 33 bags of Canadian peas that were being transported from Nepal for sale in India. The same report described a separate interception involving 12 bags, or five quintals, of foreign walnuts. The goods were handed to customs authorities. These seizures do not establish the size of today’s traffic, but they show that walnuts and peas have used this corridor before.

Domestic growers face an uneven market

For producers in Jammu and Kashmir, the immediate issue is not only competition from a cheaper product. Smuggled walnuts avoid the costs borne by compliant importers and traders, including customs procedures and product checks. That creates an uneven market: domestic growers must cover harvesting, processing and inland logistics, while illicit supplies can enter without the full cost of legal trade. At ₹350-400 per kilogram, Chinese walnuts can undercut the lower end of the domestic range by ₹300 per kilogram.

Legitimate importers and processors also face commercial risk. Unrecorded goods obscure actual supply, complicate purchasing decisions and can weaken confidence in origin declarations. For Canadian pea suppliers, diversion through Nepal would similarly separate the product from normal customs records and traceability controls. The reports do not identify the companies or intermediaries involved, and they provide no evidence that Chinese or Canadian producers participated in the smuggling.

Enforcement will determine the market impact

The open and commercially active India-Nepal border supports extensive legitimate trade, but it also presents enforcement challenges when goods are divided into smaller consignments and moved away from formal checkpoints. Individual seizures may disrupt shipments without removing the underlying incentive created by the price difference.

For the walnut market, the decisive issue is whether authorities can narrow the advantage enjoyed by undeclared supply. Stronger checks can protect formal traders and improve traceability, but persistent availability of Chinese walnuts at about half the price of the Jammu and Kashmir crop would continue to pressure domestic sales. Until authorities publish seizure volumes and identify the distribution network, the scale of the disruption will remain uncertain.