Nepal and China have finalised a transit protocol that will give Nepal access to Chinese ports for trade with China and beyond.
About:
This allows the transit of goods from other countries to Nepal via all of China’s ports, including Tianjin, Shenzhen, Lianygang, Zhanziang and dry-ports that include Lhanzin, Lhasa and Shigatse.
Negotiations for Transit protocol were initiated in 2016 after the economic blockade by India.
Comment:
Significance:
This will end Nepal’s heavy dependence on Indian ports for trade with other countries.
Overland trade to and from Nepal is now routed mainly through Kolkata which takes up to three months.
Challenges:
Plan to connect Nepal 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.
China’s inroad in Nepal:
The two sides are conducting a feasibility study for a Free Trade Agreement (FTA) and are planning to construct a railway link into Nepal and an electric transmission line.
China is thus challenging India’s long-held position as the dominant outside power.
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