Sunday January 21, 2018
Home India India need no...

India need not worry about Nepal-China transit agreement

0
//
109
image Source-www.infonepal.net
Republish
Reprint

Kathmandu, Nepal: With the signing of the Transit and Transportation Agreement between Nepal and China in Beijing, there is a sense of anxiety, worry and concern in Indian strategic circles about Nepal tilting towards China. Many have commented that this has ended India’s long monopoly in Nepal in doing third country business through Indian ports and, overnight, Nepal will do business, import fuel from China and so on.

As a landlocked country, seeking transit rights is Nepal’s fundamental right and, as of now, India and Bangladesh have provided such facilities to Nepal.

Realizing that Nepal will turn to China for transit and trade rights, India, during the visit of Nepalese Prime Minister K P Sharma Oli last month, had agreed to provide Visakhapatnam port for Nepal’s use. As of now, Nepal is using only Haldia in Kolkata for third-country trade but it is smaller than Visakhapatnam. During the visit, India also allowed Nepal land transit via Bangladesh, implicit being that India was already aware that Nepal would turn to China.

It is being said that had India allowed Nepal this when it was proposed over a decade ago, Nepal would not have gone with China. Second, if India had not imposed an unofficial blockade, privileging one community and group’s demand, Nepal would not have tilted towards China.

After signing the Transit Agreement with China, it is widely anticipated that Nepal will do business through Chinese ports and end its dependency on India. Such interpretations, particularly in Indian strategic circles, are beyond the ground realities and one should understand that a transit treaty does not necessarily measure up to implementation.

The poor infrastructure on the Nepali side, the difficult geographical terrain on both sides and without a rail link up to the Nepali border in Kerung (Gyirong in Chinese side), Nepal cannot immediately begin third country business through Chinese ports. Physical infrastructure on either side of the border is important for the full use of transit rights and, on the Nepali side, it will take years to upgrade Kerung, the only transit, transportation and trade route between Nepal and China.

Second, the nearest Chinese port is Tainjin which is 3,000 km from the Nepali border and the nearest Indian port is Haldia which is just 1,000 km away. This per se makes a huge difference in doing business in terms of costs, said Nepal’s former commerce secretary Purusottam Oja.

If Nepal needs to do business through Tianjin port to Kerung, it is almost impossible to import goods via trucks or containers. The only option is to rail and Chinese officials say this will happen only by 2020.

“Of course, a further extension from Gyirong is an even longer-term plan. It’s up to geographic and technical conditions and financing ability. We believe that far in the future the two countries will be connected by rail,” Hou Yanqi, deputy head of the Chinese foreign ministry’s Asia division, said in Beijing after the meeting between Oli and Premier Li Keqiang.

“Strategically it is going to be a good deal but due to distance per se, it is going to be a very costly affair for us until there is rail service from Tianjin to the Nepal border,” said Oja. “It also depends on the status of infrastructure on both sides…and paperwork. Hassle free paperwork for customs and other purposes are key in transit rights,” said Oja.

Another Nepal-China trading point, Tatopani, is shut down since April 25, 2015, earthquake and there is no official confirmation whether the Chinese side will open it up or not. In case China opens it, Nepali traders have to use trucks, containers and other light vehicles to import and export goods from Tianjin, again very costly for traders.

“I am not going to use and do business through Tianjin that is going to be three-fold expensive for us,” said Indian trader Ravi Singh, who is engaged in third-country business.

“Without stressing on connectivity, the transit agreement will not be productive,” said noted economist Bishamber Pyakurel.

“Neither it is a historic pact nor is it a non-workable one. Though it is a welcome move, its success lies in implementation,” he said in an interaction with journalists.

It should also be remembered that Nepal is doing business with India through 24 small and big trading points whereas Nepal is doing business with China only through one trading point.

Then, India has also proposed to build five rail corridors with Nepal and one is proposed to connect Uttar Pradesh and Kathmandu.

The ground realities more than make clear that the ‘China card’ remains more of an illusion but Kathmandu has finally made the strategic move that New Delhi is bound to have taken note of. (IANS)

Click here for reuse options!
Copyright 2016 NewsGram

Next Story

All You Need To Know About India’s Strategic Chabahar Port

The Chabahar Port is a seaport in Chabahar, which is on the Gulf of Oman, near Iran-Pakistan border.

0
//
16
Chabahar Port is of great international significance in terms of trade, especially for India. Wikimedia Commons
Chabahar Port is of great international significance in terms of trade, especially for India. Wikimedia Commons

By Ruchika Verma

  • The Chabahar Port is of great strategic importance for India
  • It is in Iran and is being built and operated by India
  • This port will increase India’s trade with Central Asia and Europe

The Chabahar Port is a seaport in Chabahar, which is on the Gulf of Oman, near Iran-Pakistan border. Chabahar is the trans-shipment and logistics hub for the Makran Coast and Baluchistan province of Iran.

Chabahar Port is built and operated by India. Wikimedia Commons
Chabahar Port is built and operated by India. Wikimedia Commons

The tension between India and Pakistan is nothing new. There are several instances where both the countries have tried to obstruct each other’s political or economic agendas. This obstruction, along with other strategic reasons, resulted in the India and Iran’s deal on the Chabahar Port, which is crucial because of several reasons.

Here are few things about it you may not have known before :

  • Under the Trilateral Transit and Transport Agreement of 2016, the Chabahar port is the gateway to the Transport Corridor between India, Iran and Afghanistan, which allows multi-modal goods’ and passengers’ transport.

Also Read: India and Iran sign agreement to develop Chabahar Port

  • The agreement also states that India will develop and operate two berths in the first phase of the port. The contract is for 10 years and extendable. This time period excludes the first two years as they will be used for construction.
Chabahar Port will make India's trade with Afghanistan easier. Wikimedia Commons
Chabahar Port will make India’s trade with Afghanistan easier. Wikimedia Commons
  • The Chabahar Port’s first phase, which was developed by India, and inaugurated by Iran on 4th December 2017, is of great strategic importance as it makes it easier for India to conduct trade with Central Asia and Europe.
  • Iran’s Chabahar port is also important for India’s trade because of Pakistan’s reluctance in allowing India to send goods to Iran and Afghanistan through its land territory.

Also Read: Gwadar Port: China Turning Pakistan Port Into Regional Giant 

  • The development of Chabahar Port will increase the momentum of the International North-South Transport Corridor whose signatories include India, Afghanistan and Russia. Iran is the key gateway in this project. It will improve India’s trade with Central Asia as well as Europe.
    The Chabahar Port has also reduced Afghanistan’s dependence on the transit road, which went through Karachi. Now, trade can be conducted via Chabahar Port too. Islamabad has accused India of trying to use this development as a means to destabilise Pakistan.

    The Chabar Port is the said to be the counter to the Gwadar Port. Wikimedia Commons
    The Chabar Port is the said to be the counter to the Gwadar Port. Wikimedia Commons
  • The Chabahar Port also acts as a counter to the barely 100 km away, Gwadar port in Pakistan, which is developed by China. However, Iran has defended that Chabahar is not a rival to Gwadar and Pakistan is invited to join in its development.
  • In October 2017, India sent its first shipment of wheat to through Chabahar to Afghanistan, in order to test the viability of the route.
  • India will also construct a 900-km Chabahar-Zahedan-hajigak railway line that will connect Port of Chabahar to Hajigak in Afghanistan. It will also connect Mashad in the north, providing access to Turkmenistan as well as northern Afghanistan.This project is worth $1.6 billion.

    India will supply $400 million worth of steel rails to Tehrain. Wikimedia Commons
    India will supply $400 million worth of steel rails to Tehran. Wikimedia Commons
  • It is being said that India will supply $400 million of steel rails to Tehran. There are also possibilities of setting up a fertilizer plant through a joint venture with the Iranian government.