03/23/2016, 13.31
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Nepal and China seal transit deal that ends India’s stranglehold on Kathmandu’s trade

Nepali Prime Minister K P Sharma Oli and his Chinese counterpart, Li Keqiang, ink a series of agreements, the most important of which gives transit rights to Nepali goods. Thus, Nepal is free from dependence on Indian ports to export its goods. The deal also boosts China’s ‘One Belt, One Road’ strategy, by which Beijing wants to expand its access to markets in Europe and Africa.

Kathmandu (AsiaNews) – During the official visit to Beijing by Nepali Prime Minister Khadga Prasad Sharma Oli, the governments of China and Nepal signed a series of agreements sealing the friendship and collaboration between the two Himalayan neighbours. At the same time, the deals open up new scenarios in South Asia’s economic and geo-political balance to the detriment of India.

The main agreement – the Nepal-China transit treaty signed on Monday – grants Nepal transit rights in mainland China. Hitherto, the landlocked mountain nation had a similar deal with its southern neighbour. Now Nepali exporters can use Chinese ports, thus ending Nepal’s trade dependence on India.

For China, it means another important piece to its "One Belt, One Road" strategy, which involves a series of ports and roads along its trade routes to Europe and Africa.

For Nepal, the need to find an alternative route for its goods emerged forcefully during India’s five-month embargo. After its northern neighbour adopted a new constitution, New Delhi shuttered its 1,800-kilometre border, preventing Nepal from importing even basic goods.

“My trip to China is not ordinary. I have a special mission to rewrite the history between Nepal and China,” Prime Minister Oli said during his meeting with his Chinese counterpart.

In addition to the Transit Treaty, the two countries agreed on several other files. The latter include a deal on building, managing and maintaining a bridge on the Xiarwa River, in Nepal’s Humla district, on the border between the two countries; working together on the Pokhara Regional International Airport Project; pursuing joint exploration of oil and gas resources; strengthening intellectual property rules; and launching a joint feasibility study on a China-Nepal free trade agreement.

Despite the sweeping deal, several experts doubt that Chinese ports will be accessible on the short run because of the Himalayas, which are still difficult to cross.

In India, doubters point out that for Nepal the deal is not that convenient; for instance, the Nepali capital of Kathmandu is more than 2,400 km from the nearest Chinese port, Guangzhou, but only 866 kilometres from Kolkata.

Still, everyone agrees that the treaty is a fundamental game-changer for both countries. For Nepal, it will gradually reduce its dependence on India.

“The deal is important,” said Tank Acharya, a diplomat. “It was possible not because China gives more priority to Nepal than India, but because China is working for global connectivity and Nepal’s territory will be used to connect [continental] Asia and South Asia through road links.”

Thus, “China will boost its trade more than India with this agreement. This sealed China’s interest.” As Chinese President Xi told Prime Minister Oli, "Nepal can be a bridge between China and India".

(Christopher Sharma contributed to this article)

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