Border uncertainty in north troubles traders again— ahead of festivalsContainers holding goods imported for Dashain remain stranded at check points since last week.
More than 300 Nepal-bound containers were stopped at the northern border after China imposed lockdowns in different cities following a surge in Covid cases.
The container trucks hold goods worth billions of rupees imported for the upcoming Dashain festival, and they have remained stranded at the checkpoints for the last two weeks.
Worried Nepali traders say they may miss out on the festival shopping season again like in the past two years when their shipments were held up at the Rasuwagadhi and Tatopani points.
The border closure comes as a double blow for traders who say their business has shrunk after the government banned imports of 10 types of products almost four months ago.
The government has also made it mandatory for traders to keep 100 percent margin to open a letter of credit to import goods as part of a series of measures intended to conserve foreign exchange reserves.
China closed the northern border weeks after it agreed to open it for two-way trade.
“If the lockdown imposed in Shigatse and Lhasa is prolonged, it will be a debilitating situation for traders,” said Ashok Kumar Shrestha, president of the Nepal Trans Himalayan Border Commerce Association. "The closure ahead of the festival season will sink billions in investments by Nepali traders.”
Narayan Prasad Regmi, joint secretary at the Ministry of Industry, Commerce and Supplies, said, “We recently held a meeting with our Chinese counterpart regarding the closure of the border points. They said that unless the lockdown in Shigatse is lifted, the border will not open.”
According to Regmi, no deadline had been fixed to reopen the border for two-way trade.
China closed the Tatopani border point on August 10 and the Rasuwagadhi border point on August 14, just as Nepali Foreign Minister Narayan Khadka visited the northern neighbour, following a rise in coronavirus infections in Tibet.
According to a statement issued by the Foreign Ministry, Foreign Minister Khadka and his counterpart Wang Yi had agreed to “open Rasuwa-Kerung and Tatopani-Khasa ports for two-way trade as soon as the fresh wave of Covid pandemic in Tibet Autonomous Region of China is controlled.”
Since then, all goods bound for Nepal from China have remained stuck at the border. Dashain is nearly a month away and it will take two months to reroute the consignments through Kolkata port, traders said.
“As Covid cases are rising, it appears that China will not reopen the border until infections drop to zero,” Shrestha said. The stranded containers hold garments, clothing accessories, footwear and electronic goods.
There is no way to tell when the border will reopen, and Nepali traders stand to lose heavily if their goods arrive after the festival.
Many importers are not taking any chances, and have been rerouting their inbound cargo through the southern border points to avoid delays and losses.
It normally takes two months for goods ordered from China to arrive in Nepal by sea freight, and two weeks by container truck overland across the northern border.
Nepali officials say they are unaware of how many containers have been stranded on the Chinese side of the border. Nepali officials also are also not informed about the closure of the borders.
“We have not been officially informed about the numbers of containers halted on the other side of the border,” said Narad Gautam, chief customs officer of the Tatopani Customs Office in Sindhupalchok. “Before the border closure, eight to ten containers were arriving daily through the Tatopani point. We only have heard that a few cities in China are under lockdowns.”
Issuing a press statement on Sunday, the Federation of Nepal National Business urged the government to do the needful through diplomatic negotiations to open the trade route as soon as possible.
“This is an unofficial border closure by the Chinese side ahead of Nepalis’ major festivals,” said Naresh Katuwal, immediate past president of the Federation of Nepal National Business. “The border closure problem has been recurring for the past several years. Closing the borders all the time under the pretext of Covid is not a solution.”
According to him, the border can be opened following strict safety measures. “Shutting the border completely harms everyone,” he added.
According to the Department of Customs, Nepal’s imports from China increased by 13.19 percent in the last fiscal year ended mid-July. The country imported goods worth Rs264.78 billion from China. Exports from Nepal to China plunged by 25 percent to Rs808.75 million in the last fiscal year from Rs1 billion in the previous fiscal year.
"It has been 30 months since exports through the Rasuwagadhi point stopped and people have not been allowed to cross the border," said Ram Prasad Mainali, chief of the Rasuwa Customs Office.
China closed its border points due to the pandemic in January 2020, and they have not been fully operationalised since.
The closure of the Chinese border since early 2020 has affected a large number of Nepali entrepreneurs exporting goods to China. The Kerung and Tatopani border points have been reopened, but neither export nor import trade has picked up.
The Tatopani-Khasa border point reopened on May 29, 2019, after remaining closed for four years following the 2015 earthquakes. The border point was a major overland route for trade with the northern neighbour.
The Rasuwagadhi-Kerung customs point, which was elevated to an international checkpoint between Nepal and China allowing people from third countries to cross the border, reopened in July 2020.
During the joint consultation meeting on border affairs held virtually between the officials of Nepal and China on July 14, the two sides agreed to resume two-way trade through the Rasuwagadhi-Kerung border port by adhering to Covid health protocol and guidelines.
Towards this end, the two sides also agreed to establish an epidemic prevention and control mechanism.
On March 25, visiting Chinese Foreign Minister and State Councillor Wang Yi had assured Nepali officials that trade between Nepal and China would be eased. But traders say transportation problems still exist.
There is a pressure from Nepali traders to open the borders ahead of the festive season.
“The Nepali Consulate in Lhasa has requested the Chinese officials to consider the situation and facilitate the trade,” said Gautam. “We know nothing more than this.”