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India Shuts Key Nepal Routes in Trade Dispute

From Reuters

The lifelines of this landlocked Himalayan nation remained almost completely cut Saturday after India closed vital routes between Nepal and the rest of the world because of a trade dispute.

Trade and transit treaties between the countries expired Thursday, with negotiations for renewal at an impasse. Nepalese Foreign Minister Shailendra Upadhyaya plans to fly to New Delhi today in an effort to revive those negotiations, officials here said.

India, which blames Nepal for the problem, closed all but two of the 13 transit routes on their common border Friday. Mountainous Nepal, sandwiched between India and China, relies on India for almost half its total imports and most essential commodities.

Although Katmandu has said there are adequate reserves of essential commodities, rationing of kerosene and other basics has begun.

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New Delhi said a temporary pact initialed last September expired because Nepal had not done the paper work to put it into effect.

It now wants fresh talks but says Nepal has lost all its favorable trade treatment won under the expired treaties, including several entry points for goods.

Nepal’s 39-year-old friendship pact with India has been a cornerstone of the kingdom’s foreign relations. But Katmandu’s growing ties with China have alarmed New Delhi.

A Foreign Ministry spokesman in New Delhi said closing most of the trade routes was not meant to create hardship for the Nepalese, and essential goods like medicines and baby food would not be affected.

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Officials here suggested that Nepal is prepared to hold out for a favorable new pact.

“It is high time to restructure our relationship with India, and if we fail this time we will be dependent for many years to come,” said one Nepalese official. “It should be the beginning of a more mature relationship between Nepal and India, and for this, people should be prepared to face any hardship.”

Katmandu strongly opposes India’s bid to tie the trade agreement to transit rights for Nepal.


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