Floods Cripple Nepal-China Trade Route, Deepening Reliance on India
Devastating floods at Rasuwagadhi have halted Nepal's primary northern trade corridor with China, causing an estimated Rs 1 billion in losses and forcing traders to seek alternative routes. Analysts warn the disruption will further entrench Nepal's economic dependence on India, which already accounts for 65 percent of its international trade.
KATHMANDU — Nepal's trade with China has been severely disrupted after floods caused extensive damage to Rasuwagadhi, the country's main northern trade point with China.
Analysts say the disruption could further increase Nepal's economic dependence on India. Floods on August 26 (Bhadra 10) damaged the customs point at Rasuwagadhi as well as 45 kilometres of the 145-kilometre road linking Kathmandu with the Chinese border.
With customs clearance suspended, traders importing Chinese electric vehicles, electronics, garments and other goods have been forced to look for alternative routes.
According to Ram Hari Karki, president of the Nepal Trans Himalayan Border Commerce Association, 76 businesspeople and their employees remain missing. The floods also swept away around 200 containers, including about 70 for which customs duties had already been paid. He estimated the losses at around Rs 1 billion.
Nepal conducts about 65 percent of its international trade with India. Despite efforts to expand trade with China, the trade imbalance between the two countries remains wide.
According to the Department of Customs, Nepal imported goods worth Rs 425.24 billion from China in the last fiscal year while exporting goods worth only Rs 1.89 billion.
Infrastructure engineer and policy analyst Surya Raj Acharya said repeated disruptions along Nepal's northern trade routes could deepen the country's reliance on India.
"Such incidents and uncertainties in the supply chain make Nepal even more dependent on trade with India," Acharya told Nikkei Asia.
Of Nepal's three major northern trade routes, Rasuwagadhi is currently affected by flood damage. The Tatopani border point also remains closed, while only two to three cargo vehicles are passing through the Korala border point each day.