Nepal’s connectivity with China: Status and Prospects

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CESIF (Center for Social Inclusion and Federalism) organized a webinar on September 27, 2021, to discuss on the topic of Nepal’s connectivity with China. The webinar was opened by Shraddha Ghimire, a research fellow at CESIF by presenting the key findings of her research titled ‘Nepal-China Transit Transport Agreement (TTA): An Analysis’. The presentation was followed by remarks and comments from the guest speakers.

To watch the full webinar, follow the link here.

Speaker Details

  • Purushottam Ojha – He served as the Secretary of Ministry of Industry, Commerce, and Supplies. He is currently a freelance consultant in the areas of trade, transit, investment, private sector, and institutional development.
  • Laxman Basnet – He is a former Executive Director at Nepal Intermodal Transport Development Board under the Ministry of Industry, Commerce and Supply. He has also worked as Chief Tax Officer at the Inland Revenue office.
  • Namrata Sharma – She is the former chairperson of Center for Investigative Journalism (CIJ), and currently works as an Editor for Nariswor Magazine. She also works as a Chief Board Advisor of Human Rights Journalists’ Association (HURJA).

The first speaker, Mr. Purushottam Ojha argued that TTA should be developed as a safety valve in an event of crisis such as embargo or blockade. He talked about the factors affecting TTA agreement and ways to improve the connectivity with China. The three factors that he highlighted regarding the TTA agreement were distance between the seaports and the border, time and cost of using the transit system, and lack of proper road infrastructure in Nepal side. Furthermore, he highlighted that the TTA agreement is incomplete. It doesn’t include the details about customs, insurance, and liability and these details have been left at the discretion of Chinese officials. It is important to understand that different cargos need different procedures, in terms of liability, insurance, and cost. So, Mr. Ojha insists that without the incorporation of these details in the agreement, the agreement will remain incomplete.

Mr. Ojha then highlighted four key points to improve the TTA between Nepal and China. The first point that he emphasized was to develop procedures to improve the transit. One of the ways to improve the transit is through trial run process which would help estimate the total time and cost. The next point that he emphasized to improve the TTA is through regular dialogues between the government. He pointed that there have been many agreements between Nepal and China which haven’t been implemented in action, one of them being zero tariff agreement. Thus, he highlighted the importance of regular dialogues for proper implementation of agreements. Similarly, he also stressed the need for our own internal transit policy which could be then used to further transit policies between other nations. Finally, he also highlighted the need to improve physical connectivity with Nepal and focus on the development of North-South corridor.

The second speaker, Mr. Laxman Basnet started his discussion by highlighting the history of transit facilities to landlocked country which was initiated in the UN convention of 1982. Then he touched on the time frame taken to finalize the TTA (around 3 years). He explained that time frame taken to finalize the agreement is a setback to the country. Similarly, he highlighted the need to shift away from Rasuwa and Tatopani border points and establish Mustang as a main transit point. He pointed the fact that there is no clarity on Rasuwa and Tatopani road improvement. Furthermore, the geography of Rasuwa and Tatopani is very challenging in comparison with that of Mustang, which makes it a good border transit point to North. Finally, he also added that the involvement of private sector is important to enhance the connectivity.

The third speaker, Ms. Namrata Sharma touched on the importance of proper homework and preparation from Nepali delegation that would benefit the Nepali people. She highlighted that the past agreements have missed important bits and pieces which have ultimately affected the people of Nepal. Finally, she added that any agreement including TTA should be properly analyzed to examine how it benefits the people of Nepal and the environment.

To conclude, all the speakers have highlighted the need for investment in domestic infrastructure and capacity building so that Nepal can become a transit state for its neighbors. One of the ways to enhance the investment is by attracting the private sector. Similarly, to improve the TTA, the speakers have pointed out the importance of understanding and researching the modalities for the movement of goods through Chinese territories. Finally, the need for transit policies for better negotiations in the future was also highlighted.

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