When the Tatopani-Khasa border point reopened on May 29, after remaining closed for four years following the 2015 earthquake, it gave hope for revitalised bilateral trade with China. After all, before the devastating quake damaged border infrastructure, the border point was a major mainland route for trade with China, with the Tatopani Customs Office collecting over Rs15 million in revenue daily.

But expectations were short-lived. Movement across the border point has been negligible over the months since it reopened. Rather, the Rasuwagadhi-Kerung customs point, which was being used as an alternative route after the closure of the Tatopani-Khasa point, seems to be getting more traction.

Multiple traders the Post spoke with say Nepal has not been able to make a push to once again make the Tatopani border a vibrant trading point, largely because of China’s focus on the Rasuwagadhi-Kerung route.

Though China has not said anything explicitly about its border point preferences, the stringent regulations put in place for cross-border trading via Tatopani-Khasa say everything, according to traders.

“Nepali importers are facing a difficult time complying with China’s security norms,” Hem Rawal, president of the Nepal Foreign Trade Association, told the Post. “The Chinese side has apparently put in place security concerns due to which the pace of trade through Tatopani has been slow.”

According to traders, the Chinese government has been allowing cargo movement via Tatopani under stringent regulations. Only a handful of containers have entered Nepal in the two months since the border point reopened. Until a month ago, only five trucks had entered Nepal. Since then, new trucks have barely made it through.

In contrast, there has been a massive rise in the movement of cargo via the Rasuwagadhi-Kerung border, according to Bacchu Poudel, president of the Nepal Trans Himalayan Border Commerce Association. On average, over 30 containers make their way into Nepal through the trade point every day.

Traders are now concerned that the Nepal government’s apathy for fully opening the Tatopani border and China’s cumbersome regulations for trade will direct all trade towards Rasuwagadhi, even though it is a more difficult route and is farther away from Kathmandu. Kerung is situated at a distance of 190km from Kathmandu while the distance between Tatopani and Kathmandu is 115 km.

“Apart from the distance, road access to Rasuwagadhi is very poor, which leads to high transportation costs for traders,” said Poudel.

Though the Tatopani-Khasa route was reopened with much pomp and ceremony, traders say the construction of the Kodari Highway is not on par with what the Chinese had committed to. The dry port too has failed to fully come into operation.
 
According to Poudel, the Chinese have been allowing Nepali truckers to load and unload Nepal-bound goods only from Lhasa, which is around 600km from the Nepal-China border point in Khasa. 

 “This is a clear indication that neither Nepal nor China is willing to fully operationalise the [Tatopani] trade route,” said a member of Nepal-China Chamber of Commerce on condition of anonymity.

 Before the earthquake, China offered Nepali importers easy access to Khasa, which was a hub for cross-border business transactions. But with business thriving, the once sleepy Chinese town became a destination for “unlawful activities”, including smuggling and prostitution. The Chinese also suspected the border point was offering safe passage for Tibetans, according to traders.

“The Chinese authorities could be discouraging trade via Tatopani under the old modality due to the possible movement of Tibetans,” said a trader who did not wish to be named.

According to the trader, the Chinese authorities believe it is easier to track movements via Rasuwagadhi-Kerung than Tatopani-Khasa due to the topography.

Jib Raj Koirala, a former joint-secretary at the Ministry of Industry, Commerce and Supplies, said that China was trying to control unlawful activities in the Khasa market even before the earthquake. “The northern neighbour tightened security at the border area where the illegal activities were flourishing at an uncontrollable rate,” said Koirala.

China has also been promoting the use of the Kerung border due to easy market access for Chinese goods in India, he said.

“As the Kerung-Rasuwagadhi-Galchhi road offers the strategic trade route to access markets in India, compared to the road that links Tatopani to Kathmandu, China might have prioritised transactions through Kerung,” said Koirala.

Given this discouragement of the Tatopani border and a slow push towards Rasuwagadhi, more import is now likely to take place via the latter.

“Many traders are now looking to import goods for the upcoming festival season through this customs point,” said Poudel.

The Ministry of Industry, Commerce and Supplies, however, does not believe that China is pushing trade towards Rasuwagadhi at the expense of the Tatopani trade route.

Kedar Bahadur Adhikari, secretary at the ministry, said that the modality of border operations will only be finalised once the two countries operationalise the Protocol to the Agreement on Transit and Transportation. The two countries signed the agreement three months ago, during President Bidhya Devi Bhandari’s trip to Beijing.

“When the dry port was handed over to Nepal, the Chinese had assured that the Tatopani trade route would come into full operation once the agreement is enforced,” said Adhikari. “In addition, Nepali traders at present have only been provided access to one transport company in China when previously they had access to 8-10 Chinese transporters.”

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