Nepal-China Border Trade Mechanism Concludes Third Meeting in Lhasa with Key Agreements

The third meeting of the Nepal-China Coordination Mechanism on Border Trade and Cooperation was held in Lhasa, the capital of China's Tibet Autonomous Region, on Magh 6-7 (January 20-21, 2026). The Ministry of Industry, Commerce and Supplies stated that significant achievements and agreements were reached regarding bilateral trade, customs facilitation, infrastructure development, investment, and other areas of cooperation.

The Nepali delegation was led by Dr. Ram Prasad Ghimire, Secretary of the Ministry of Industry, Commerce and Supplies, while the Chinese side was led by His Excellency Chao Peng, Vice Chairman of the Tibet Autonomous Region People's Government. The meeting reviewed the progress made in implementing the decisions and agreements from the second meeting held in Kathmandu in November 2024 and provided guidance for future areas of cooperation. Furthermore, extensive discussions were held on various issues related to bilateral trade, investment, transit, customs facilitation, technical cooperation, and trade infrastructure development.

Discussions also covered the contemporary amendment of the Trade and Payments Agreement of 1981, simplification of border entry passes for traders, drivers, and co-drivers, expediting the Tokha-Chhare Tunnel construction process, determining quotas for chemical fertilizer imports, continuing China's zero-tariff policy even after Nepal graduates from the Least Developed Country status, and the Chinese side providing vehicle re-routing facilities during disasters.

Positive discussions were held regarding enhancing customs facilitation and border management by effectively implementing the Nepal-China Border Transport Agreement to reduce trade time and cost, promoting import and export of goods through a risk-based inspection and green channel, strengthening laboratory testing, exchanging bilateral trade data, facilitating vehicle movement, and easing jute exports from Nepal. Both sides also committed to further enhancing the effectiveness of law enforcement through mutual coordination for border security.

An understanding was reached to advance Nepal's proposal concerning road construction, the Friendship Bridge, connecting roads between Kimathanka in Nepal and Chentang in the Tibet Autonomous Region (China), and the construction of ICDs at Kimathanka through diplomatic channels. Discussions also focused on continuing the construction work of the ICD at Timure, Rasuwa (Gyirong), facilitation from the Nepali side regarding the Hilsa-Simikot road in Mustang, and road construction between Rasuwa-Syafrubesi, with the Chinese side agreeing to expedite construction work.

Furthermore, an agreement was reached following discussions on the Chinese side's proposal to establish sisterly ties between any municipality in Rasuwa District and Gyirong in China, whereby the Chinese side will formally send a proposal through diplomatic channels. An agreement was also reached to move forward with the Nepal-China High-Tech Agricultural Park construction project. Both sides agreed to implement the concept of Authorized Economic Operator (AEO) certification, resume the Kathmandu-Lhasa bus service, and strengthen mutual cooperation in the field of traditional medicine.

The meeting concluded in a friendly and positive atmosphere, with both sides agreeing to hold the next (fourth) meeting of this mechanism in Nepal in 2027, with the date to be determined by mutual consent. The Nepali delegation included senior officials from Nepal Rastra Bank, the Consulate General of Nepal in Lhasa, the Ministry of Industry, Commerce and Supplies, and the Ministry of Finance. The Chinese delegation included senior officials from the Department of Commerce of the Tibet Autonomous Region, the Office of Foreign Affairs, Chinese Customs, and other government agencies.