Nepal gets access to 4 China ports, ending Indian monopoly on transit

Nepal gets access to 4 China ports, ending Indian monopoly on transit

News:

1. Nepal and China finalised the protocol of the Nepal-China Transit and Transportation Agreement.

Important news:

2. It will give Kathmandu access to four Chinese ports.

3. About the Transit and Transportation Agreement (TTA)

TTA  will allow Nepal to transport its imports and exports via its neighbour’s territory, China.

• Nepal will be able to access seaports like Shenzhen, Tianjin etc and land ports ( dry ports) like Lhasa to conduct international trade.
• Both sides decided to access Chinese territory from six checkpoints.

4. Reasons to sign the TTA between two Nations.

• Geographical reasons: Nepal is wedged between China and India. So being a landlocked nation, Nepal is trying to diversify its trading routes.
• Political reasons: ⦁     The Madhesi agitation in 2015 had forced Nepal to explore trade links with China and reduce its long term dependence on India.
• Economic reasons:  India’s prolonged blockade across border crossings with Nepal in 2015 and 2016 left the country short of fuel and medicine for several months which impelled Nepal to sought alternatives.
• External influences:   China is making fast inroads into Nepal with aid and investment, challenging India’s long-held position as the dominant outside power.
• Logistic issues:   Nepali cargo from Japan, South Korea and other north Asian countries if routed through China would cut shipping time and costs as overland trade through Kolkata port  takes up to three months.

5. Benefits to Nepal from TTA:

• It will be one of the milestones because Nepal will be  getting access to four Chinese ports in addition to two ports ( Kolkata and Visakhapatnam)  in India.
• Nepal will no longer be dependent only on India for trade with other countries as it will be able to use Chinese sea and land ports.
• Nepalese traders will be allowed to use any mode of transport – rail or road to access  seaports of China for third-country trade.
• It would cut shipping time and costs as overland trade to Nepal via port of Kolkata  takes up to three months.

6. Challenges in implementation of TTA:

• ConnectIvity of 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 (1,625 miles) from Nepal border. So distance would remain a major issue in the trade and transit.