Nepal turns to China for trade, transit, fuel

Kathmandu, Dec 21 (IANS) Nepal’s Deputy Prime Minister Kamal Thapa will travel to China on Wednesday to seek help on importing fuel and expanding road connectivity and transit facilities.

The move comes amid persisting strains in Nepal-India relations following the virtual closure of border points on their frontier, leading to major shortages in the Himalayan nation.

With protests triggered by Nepal’s new constitution leading to the crisis, Nepal is facing shortages of essential commodities like food, fuel and medicines.

Thapa, who is also the foreign minister, visited India twice in the last three months to try resuming the normal supplies of essential commodities.

Announcing the six-day official visit to China, the foreign affairs ministry said Thapa will meet his Chinese counterpart Yang Yi and other senior leaders in China.

Officials privy to the visit said Nepal was preparing to sign a trade and transit treaty with China, similar to one that exists with India.

Nepal has forwarded a proposal to China for approval.

If Beijing consents, Nepal will have access to Chinese ports for export and import to a third country. The nearest Chinese port from Nepal is Shanghai.

If the two neighbours sign the pact, Nepal’s dependency on India for trade with the rest of the world will end. But officials warned that Nepal will have to drastically improve its connectivity with China.

Nepal will also seek a Free Trade Agreement with China during Thapa’s visit. Priority will be attached to duty free access for Nepali exports to China, informed sources said.

China has granted duty free access to 8,800 Nepali items but many of them are not exportable to the north.

“We are seeking concessional treatment for exportable items, rather than the big numbers,” one official told IANS.

Another item on the agenda is a government-to-government deal to import fuel from China. The two sides are expected to settle issues related to tax, transportation and logistics.

Officials said Nepal’s priority was to open at least four border points — at Kerung, Tatopani, Korala and Kimathanka.

“These four passes have an immediate prospect of opening. While resuming trade from these points, we will gradually seek the opening of five more routes,” said the official.

Opening up more trading routes with China means Nepal wants to diversify its trade with China, said officials.

During the visit, Nepal and China will sign an agreement for Rs.14.5 billion pledged by the Chinese president.

A big chunk of the aid will be spent on widening the Kodari highway that connects Kathmandu with the Chinese border.

Following the April earthquake in Nepal, Kathmandu’s trade with China via Tatopani in Sindhupalchok has been disrupted.

As an alternative, the Rasuwagadhi border point with China was opened but the road is difficult for big cargo vehicles to pass.

Nepal accessed 1.3 million litres of fuel granted by China via Kerung after India imposed — according to officials here — an unofficial border blockade citing unrest in the Tarai region.

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