Nepali traders have accused China of conducting an 'undeclared trade blockade' as their merchandise-laden container trucks have not been allowed to cross the border into Nepal for the past 16 months.

Naresh Katuwal, president of the Nepal National Traders' Federation, said their shipments were still being held up at the northern border on the pretext of the Covid-19 pandemic.

Almost 2,000 containers loaded with clothes, shoes, cosmetics, electronics and industrial raw materials were stopped at the border during the October-November festive season. Only a fraction of the goods have been released, traders said.

"Around 300 containers have remained stranded at the Kerung and Tatopani border points for the last 16 months,” Katuwal said.

China permitted only a few trucks to enter Nepal for the festive season, and most importers rerouted their goods through Kolkata port in India, adding tremendously to their transportation costs, several traders told the Post.

“Some goods are still stuck at the border. We have discussed the matter multiple times with China, and have asked all key political leaders including the concerned ministries. We even requested the Ministry of Foreign Affairs to resolve the issue diplomatically. But no outcome has been forthcoming,” Katuwal said.

“We have taken this gesture of China as an unofficial blockade,” Katuwal told the Post. “If this situation continues, there is no point in doing trade with China,” he added.

While the traders were waiting anxiously for their goods to be allowed to pass, Chinese transporters hiked the freight charges, he said. The cost of transporting goods over the 26-km distance from the Chinese border point to the Nepali border point has been raised from RMB 15,000-16,000 to 60,000-65,000 per container.

According to the Trade and Export Promotion Centre, imports from China dropped 18.5 percent year-on-year in the first half of the current fiscal year. Nepal bought Rs96.33 billion worth of Chinese goods in the first six months, down from Rs118.25 billion in the same period in the last fiscal year.

Exports to China also fell by 50 percent in the first six months of the current fiscal year. Shipments were valued at Rs500 million, down from Rs1.02 billion in the same period in the last fiscal year.

Nepal imports readymade garments for all age groups, cosmetic products, footwear, fast-moving consumer electronic items and stationery goods, among other products, from China.

“We have been trying to sort out the issue, but nothing is going in our favour,” said an official at the Ministry of Industry, Commerce and Supplies, who wished to remain unnamed.

“Not more than two-three containers have been crossing the border daily from the Kerung and Tatopani border points. Now Tatopani has been shut down for maintenance,” Katuwal said.

Traders have stopped ordering new goods from China, he said, adding that Kerung was the easiest route for traders to import goods.

Manish Lal Pradhan, president of the Export Promotion Committee at the Federation of Nepalese Chambers of Commerce and Industry, said that the trade points in China were almost closed, and they were unable to export handicraft items like metal statues.

“The government should be serious and resolve the issue through bilateral talks. It’s not only a matter of imports, exports too have plunged," Pradhan said.

The goods that used to come directly from China are now being rerouted through Kolkata port in India.

Prakash Dahal, joint secretary of the Ministry of Industry, Commerce and Supplies, said that the Nepali consul general in Lhasa had gone on a field visit to check both border points.

“They said that maintenance work at Tatopani would be finished by February 8, and 20 cargo containers would be dispatched daily after that,” Dahal told the Post. “Let’s wait and see,” he said. "But there is no such thing as an unofficial blockade as the traders have charged," he said.

Dahal said that the traders had inflated the number of container trucks stranded in China.

“We talked with two cargo companies in China, and they said that no more than 25-30 containers were left at the Kerung border point. There is not one container left at the Tatopani border point,” he added.

“We have been trying to fully open the border, but the Chinese side is reluctant to do so until the virus situation comes down to zero,” a ministry official said.

“A joint secretary-level meeting of the Foreign and Commerce ministries has already been held. We have also raised the issue of the higher transportation charges with the Chinese Foreign Ministry and communicated with them twice,” Dahal said.

“We have been fulfilling all the requirements as asked by China to follow Covid-19 protocols,” Dahal said. “A high-level delegation from the Foreign Ministry needs to be formed to hold intensive talks with China to resolve all trade issues,” he said.