Businessmen engaged in the Nepal-China trade have welcomed the development. “It is the news we had long been longing to hear,” said Ashok Kumar Shrestha, President of Nepal Trans-Himalaya Border Commerce Association (NTHBCA). “The reopening of the border points for movement of goods and people would help boost bilateral trade through the land routes.”
The two sides are scheduled to organize a special event on the Chinese side of the border on April 1 to mark the reopening of the border. “Officials from Nepal's consulate general office in Lhasa, Nepali government officials, Chinese officials, and Nepali drivers of cargo trucks will attend the reopening ceremony,” said a senior official of the Department of Customs (DoC). Rasuwagadhi and Tatopani have not been fully operational since early 2020 after the outbreak of coronavirus. Initially, Nepal chose to close the border after the coronavirus spread in China but border points could not be fully operational due to the strict zero-Covid policy adopted by China. China on Dec 28 last year opened the Rasuwagadhi border point for exports of Nepali goods though it was already reopened for one-way import of goods from China to Nepal only. The Tatopani-Khasa border point has remained closed for a long time though it was occasionally reopened since the pandemic hit the world. Even after the reopening of the Rasuwagadhi border point for two-way traffic of goods, China has been imposing a quota system for the export and import of goods which has prevented the full realization of export and import through this border point. According to the DoC official, the Chinese side has been releasing just 14 containers a day currently. “They have also allowed containers of Nepali goods three days a week with a maximum of 10 containers in a day,” said the official. Handicrafts, bamboo seats, carpets, and metal utensils are among the goods exported from Nepal to China through this route since the border was reopened for two-way traffic of goods. According to DoC, goods worth Rs 140.5m were exported to China through Rasuwagadhi- Kerung border points till mid-March this fiscal year. The customs official said that they expected the import of over 25 containers of goods and export of 4-5 containers of goods in a day. Due to uncertainty over the reopening of the border, the majority of Nepali importers of goods from China diverted to the sea route, which is less expensive though it is time-consuming compared to bringing goods through land routes with China. NTHBCA President Shrestha said that full reopening could encourage traders to divert their shipment routes from the seas to the land routes. “It also depends on transportation costs and connectivity and other physical infrastructure in the bordering areas,” he said. Over the last several years, imports from China have grown steadily except for occasional hiccups such as in the fiscal year 2019/20 when the government in Nepal imposed a lockdown in March 2020 to curb coronavirus transmission that went on for nearly four months. On the other hand, Nepal’s exports to its northern neighbor have dwindled leading to a massive trade deficit in the trade between the two countries. Nepal’s exports to China in the last FY 2021/22 stood at just Rs 808m, with a consistent drop from Rs 2.1bn in FY 2018/19. During the same period, imports from China grew to Rs 264.78bn in FY 2021/22 from Rs 205.51bn in FY 2018/19, according to the Department of Customs statistics. “The closure of borders has cost dearly to Nepal’s exports to China as the majority of such exports take place through land routes,” said Purusottam Ojha, former Secretary of Commerce. As a result, the ratio of exports to China compared to imports from the northern neighbor plunged to just 0.3 percent in FY 2021/22 from as high as one percent in FY 2018/19. This ratio was 3.1 percent in FY 2013/14 when the country had exported goods worth Rs 2.84bn to its northern neighbor. Nepal exports more goods to China through land routes. Since the coronavirus pandemic began, Nepali exporters have been forced to use air routes to export certain goods to China which is expensive. The DoC official said that Nepal’s export growth would also depend on whether Chinese authorities would continue to impose non-tariff barriers. “Though Nepal was allowed to export a number of goods since late December last year, Nepal’s food items have not been allowed to enter China so far,” said the official. Nepal-China Bilateral Trade (first 8 months) (in Rs, in bn)
| FY Exports Imports Trade Balance 2017/18 2.437 159.987 -157.549 2018/19 2.109 205.518 -203.408 2019/20 1.191 bn 181.920 -180.729 2020/21 1.016 bn 233.923 -232.907 2021/22 0.808 bn 264.783 -263.974 2022/23 0.52 bn 145.79 -145.27 |
