Nepal – A Potential Bridge for Trade Between India & China

The landlocked nation can become the enabler for the world's two fastest-growing economies

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

India has impeccable bilateral relations with its neighbouring countries, especially Nepal which is finding footing in the global investment sphere and China, another one of the strongest economies world is currently witnessing. Landlocked between India and China, Nepal could become the crucial link that was missing for the smooth trade between the two nations.


"Nepal could be a corridor to move goods between India and China that cuts down transport time and saves money. It is in a fantastic position to create a win-win situation for all three," stated Suraj Vaidya, the former president of Nepal's industry chamber FNCCI during a panel discussion with Nepali Finance Minister Yuba Raj Khatiwada at the Nepal Investment Summit 2019.

A sacred destination for mountaineers and tourists from around the world, Nepal has been making constant efforts to transform its image from disaster-prone nation to a progressing one. Becoming a bridge for trade between two economic giants could help its tourism industry to a great extent and also cut down transport time and save money for the other parties involved.

India-China Bridge

Nepal has a huge advantage to its geographical location between two large and different economies - China and India. The nation of Himalayas can leverage the great connectivity by way of expressways and airports and facilitate the exchange of goods between these countries to save time, huge cost and expand trades for these two economies.

Nepal being rich in tourism can leverage on the 70 per cent tourist that comes from India and China. They can take advantage of the Casino being legal in Nepal by managing it worldly and ethically. What the nation needs to learn is the importance of creating value products for promoting tourism and a currency hedging mechanism to be in place so India and Nepal would benefit from the exchange.

Added Leverage

The government of India has been providing development assistance to Nepal, focusing on the creation of infrastructure at the grass-root level, under which various projects have been implemented in the areas of infrastructure, health, water resources, education and rural & community development. Not only India and Nepal have an open border but the Indian currency circulates freely in Nepal.

Under the Treaty of Trade, India provides on a non-reciprocal basis, duty free access to the Indian market for all Nepal-manufactured articles barring a short negative list of cigarettes, alcohol and cosmetics. Being located between China and India, Nepal can leverage the high return and high value added sectors like logistics, infrastructure and tourism.