Kathmandu and Beijing have finalised a transit protocol that will give Nepal access to Chinese ports for trade with China and beyond. This will bring to an end Nepal’s heavy dependence on Indian ports for trade with other countries.
Officials of the two governments signed the protocol after a marathon meeting on Thursday night, giving final shape to the framework treaty signed between the two countries when Nepal Prime Minister K P Oli visited China in March 2016 in the wake of economic blockade by India.
An official release said the formalisation of the agreement allows the transit of goods from other countries to Nepal via all of China’s ports, including Tianjin, Shenzhen, Lianygang, Zhanziang and dryports that include Lhanzin, Lhasa and Shigatse.
Overland trade to and from Nepal is now routed mainly through Kolkata which takes up to three months, officials said. New Delhi has also opened the southern port at Vishakhapatnam for Nepali trade.
Traders say the plan to connect the country with China could face issues due to a lack of proper roads and customs infrastructure on the Nepalese side of the border. The nearest Chinese port is also located more than 2,600 km from its border.
“Nepal must develop proper infrastructure for smooth access to Chinese ports. Without this simply opening of ports will not be useful,” said Anup Malla, an exporter of woollen carpets.
China is making fast inroads into Nepal with aid and investment, challenging India’s long-held position as the dominant outside power.
Beijing and Kathmandu are also in talks for building a railway link into Nepal, constructing an electric transmission line and are conducting a feasibility study for a free trade agreement.
With Reuters inputs
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