In 1951 A.D, Nepal’s primary imports from India were clothes, oil, medicines and a few spices. Besides the four, Nepal would also import raw materials for its industries; however there was a quota limit on such imports. For clothes, oil, and medicines – there wasn’t any specific quota, and would be imported on a need basis.

At the same time, India, a state which had recently gained independence from British rule, was continuing its ‘Swadeshi Movement’ rigorously.  A key part of the ‘Swadeshi Movement’, a Mahatma Gandhi initiative, was the manufacturing of Khadi cloth on handlooms, and was designed to boycott the use of imported clothes.

However, due to lack of sufficient supply of Khadi cloth and an increasing consumerism culture in India, the demand for industrially manufactured cloth such as terrycloth or polyester was still high.

Noticing the high demand for the cloth, especially in neighbouring Indian states of Nepal – Bihar and Uttar Pradesh, the industrial cloth manufacturers of Gujurat devised a scheme.

Because Nepal did not have restrictions on import of clothes, they started exporting the clothes to Birgunj. In Birgunj, they set up huge warehouses, and in turn began to illegally channel the cloth back to Bihar and Uttar Pradesh.

Cloth Merchant Association:

The practice wasn’t new – in fact, the Gujurati traders, to protect their interests, had formed an association in 1944 A.D. itself – the “Cloth Merchant Association”. However, since the establishment of democracy in Nepal, tensions between local businesspeople and the Gujurati traders – mostly owing to party donations increased.

When Congress would ask for party donations, Nepali traders who were aware of the practices of the Gujurati traders directed Congress to collect more funds from them instead. Gujurati traders refused to pay – leading to a crisis between political leaders, Nepali traders and Gujurati traders.

The government therefore directed its people to conduct raids on the warehouses of the cloth traders. Witnessing the raids, the Cloth Merchant Association declared a general strike – not only on clothes, but also on other necessary goods.

“There is a saying – if Birgunj catches a cold, Kathmandu sneezes”, Singh tells Mathbar Singh. Meaning, anything that happens in Birgunj is bound to affect Kathmandu – in this case the strike. The further the general strike lengthened, crucial supplies to Kathmandu would be affected. Therefore, the problem required timely intervention.

Unrest in Birgunj:

Another problem at the time was also the drought in Terai – many farmers had to suffer due to lack of rainfall. Therefore, the traders started a project of expanding the ‘Ghadiarwa Pond’ of Birgunj – for this purpose they employed the labour of the affected farmers from nearby villages.

“The farmers working in the project were underpaid, however continued to work because they needed the money to feed their families”, Ganesh Man Singh told Mathbar Singh. “But the communist leaders of the time did not take a liking to it”, Singh added.

They formed a union with the labourers and started staging mass protests – many of the protests turned violent, and incidents of looting were starting to be reported.

Local Congress leaders urged the government to take action. Many Congress leaders, to express their solidarity with the locals who were increasingly aligning with the Communists started joining the protests too.

Meanwhile, the local administration was forced to clamp a curfew. However, after protesters defied the curfew, a clash between the police and the protesters ensued. Many were injured, and Congress leaders Tej BahadurAmatya, Meghraj Upadhyaya, Mathura Man Singh and Communist leaders Mahesh Mani Dixit, Dhanush Chandra Gautam were remanded in police custody.

As tensions escalated, local businesspeople of Birgunj, who enjoyed a good relation with Subarna Shumsher, reached out to him for help.

Subarna Shumsher consulted with B P Koirala and Ganesh Man Singh, and it was therefore decided that Singh would go to Birgunj in capacity of the Minister of Industry and Commerce to solve the problem.

“The solution to the problem therefore became my first test as a minister”, Singh tells Mathbar Singh.