Stung by the bitter lessons from Madhesi blockade of India trade points that caused acute fuel shortage, Nepal on Monday signed a transit and transportation treaty with China for its third-country commerce — a move that is likely to end New Delhi’s monopoly over the landlocked Himalayan nation’s trade through Haldia Port in Kolkata.
The two countries signed the agreement along with nine other treaties in Beijing, a day after Nepal Prime Minister
KP Sharma Oli began a week-long trip to China. Oli’s maiden visit as the Nepal Prime Minister comes at the invitation of his Chinese counterpart li Keqiang.
The visit is significant in the light of Nepal’s efforts to reduce its decades old dependence on India after Madhesi protesters in southern plains, agitated over the new Constitution, blocked supply trucks coming in from the southern neighbour.
The five-month-long blockade caused huge crises as fuel and medicine supplies dried up. Kathmandu blamed New Delhi for supporting the protesters but the allegation has been denied. The blockade halted for months Nepal’s third-country trade, apparently prompting the Nepalese Government to look for an alternative to the Haldia Port.
The transit agreement with China gives Nepal an option to use the next nearest Tianjin port in China that is 3,000-km from Nepal border. India’s Haldia Port is 1,000-km away.
During the talks, the two Prime Ministers made a comprehensive review of bilateral relations and expressed satisfaction over steadily growing relations between the two countries.
“The two sides exchanged substantive views on further strengthening and consolidating mutual trust and understanding as well as promoting mutually beneficial cooperation in various fields,” according to a Press release issued by Nepalese Foreign Ministry.
Trade diversification, cross border connectivity and infrastructure development, cooperation on energy, tourism, finance, education and culture were among the matters that figured prominently during the talks, it said.
During his talks with li, Oli mooted extension of China’s strategic railway link with Tibet further to Nepal. Briefing the media after li-Oli talks, Hou Yanqi, deputy head of the Chinese Foreign Ministry, said, “Nepal Prime Minister wanted to explore two rail lines.”
Hou said the Government would encourage Chinese firms to look at the internal rail plan and that China was already planning to extend the railway from the Tibetan city of Shigatse to Gyirong on the Nepal border.
“Of course, a further extension from Gyirong is an even long-term plan. It’s up to geographic and technical conditions, financing ability. We believe that far in the future the two countries will be connected by rail,” she said.
The two countries sealed ten agreements, including the much-publicised transit trade treaty which will end Nepal’s total dependency on Indian sea ports for third-country trade.
The other agreements included a feasibility study on the establishment of a Free Trade Agreement (FTA), China’s assistance to build a new airport and a border bridge over the Simikot-Hilsa road section that will connect Humla district with Tibet.
The other agreements included a treaty on economic and technical cooperation to build a Regional International Airport Project at Pokhara, Nepal’s famous tourist site.
However, there are concerns that Nepal cannot immediately use the Chinese port as infrastructure in the tiny country is poor and the Chinese side is located at a higher altitude.
One of the commercial banks in China has also agreed to open its office in Nepal. Similarly, Nepalese banks can also open their branches in China. China has also agreed to help in installation of solar panels in 32,000 Nepalese households.
Agreements in the fields of science and technology, sister-city relations between various Nepalese and Chinese cities, and establishment of Nepal’s Consular General Office in Chengdu, China, were also signed, said Gopal Khanal, foreign relations expert to Prime Minister Oli.