India and China to Resume Trade via Lipulekh Pass, Nepal Remains Silent

India and China are set to resume border trade via Nepal's Lipulekh pass. Indian media outlets have reported that the Indian government has already directed the concerned stakeholders in the area to prepare for this.  

The Government of Nepal, however, appears still unaware and unresponsive to this development. According to Ashish Bhattaigain, an official from India's Pithoragarh district, the government has issued directives for border trade and preparations have begun, as mentioned in the online edition of the Times of India. This trade is likely to commence from the upcoming month of June.

India's Ministry of External Affairs has also given permission for the trade. Indian Foreign Secretary Vikram Misri has urged Uttarakhand officials to prepare for border trade. India's Home Ministry and Ministry of Commerce and Industry have reportedly given their consent for this, but neither Nepal's Home Ministry nor its Industry Ministry has been informed.

The Ministry of External Affairs has directed the preparation of an action plan concerning matters such as the designated bank for currency exchange required for border trade and the Customs Department.

• Nepal's Objection During the Agreement

The area where India and China are planning to start border trade, Lipulekh, is Nepalese territory, which Nepal has already incorporated into its official map. India and China had previously agreed to make that territory a trade route between the two countries, which Nepal strongly protested.

In Jestha, 2072 BS, when Indian Prime Minister Narendra Modi visited China, an agreement was reached to make Lipulekh a center for trade and pilgrim movement. At that time, Sushil Koirala was the Prime Minister of Nepal. Following the agreement on the Lipulekh issue, Koirala immediately sent a 'Protest Note' to the Indian and Chinese ambassadors in Nepal through the Ministry of Foreign Affairs, expressing his objection.

At that time, some uncomfortable situations arose between Nepal and India. Following this issue, a phone conversation took place between then-Prime Minister Koirala and Indian Prime Minister Modi. Koirala strongly objected to Modi, asking, 'What is this Lipulekh issue? Why was an agreement made in Beijing regarding Nepal's territory without our consent?' Subsequently, Sushil Koirala's scheduled visit to India was abruptly postponed.

Despite Nepal's disagreement, India issued its new map in Kartik, 2076 BS, incorporating Lipulekh and Kalapani. There was widespread protest against India at that time. K.P. Sharma Oli was the Prime Minister then.  

In Baisakh, 2077 BS, India constructed and inaugurated a road from Gunji in Byas Rural Municipality-1, Darchula, up to Lipulekh.  

Following this, Nepal revised its map to include Lipulekh, Kalapani, and Limpiyadhura, and issued a new map, which was passed by Parliament with a full majority. The Government of Nepal issued this 'Chuchche' map in Jestha, 2077 BS.  

It is noteworthy that India did not accept that map, and China has not given any official reaction on this matter to date. Instead, China included Nepal's old map in its standard map issued in Bhadra, 2080 BS (August 28, 2023). Nepal did not issue a concrete reaction at that time.  

• Agreement Made by Doval

An agreement was reached to resume the Kailash Mansarovar Yatra according to the discussion held between Indian National Security Advisor Ajit Doval and Chinese Foreign Minister Wang Yi in Beijing on December 18, 2025 (Poush 3, 2081 BS). At that time too, the Government of Nepal did not raise any objection. Now, India and China have again agreed to use Lipulekh for collective trade and pilgrimage, but Nepal has not yet reacted.

Point number 6 of the press release issued by the Indian Ministry of External Affairs after the talks between Advisor Doval and Chinese Minister Wang Yi stated, 'The Special Representatives exchanged views on bilateral, regional, and global issues of mutual interest. They provided positive guidance for cooperation, including the resumption of the Kailash Mansarovar Yatra, exchange of data on cross-border rivers, and border trade.'  

While this agreement was being made in China, then-Foreign Minister Dr. Arzoo Rana Deuba was on a European tour and arrived in India from there on Poush 4, 2081 BS. Even during her four-day stay in India, she did not mention this issue.  

Later, during Chinese Foreign Minister Wang Yi's visit to India in Shrawan, 2082 BS, an agreement was reached with Indian External Affairs Minister S. Jaishankar on the point of using the Lipulekh pass for trade purposes.

After that agreement was made public, Nepal's Ministry of Foreign Affairs refuted it, stating, 'Nepal's official map has been incorporated into Nepal's constitution, and the Government of Nepal is clear on the fact that Limpiyadhura, Lipulekh, and Kalapani east of the Mahakali River are integral parts of Nepal.'  

Following Nepal's written refutation, Indian Ministry of External Affairs spokesperson Randhir Jaiswal stated that they were aware of the matter but that this trade, which has been ongoing since 1954, was halted due to Covid and is now being resumed.

• Challenge for the Future Government

Then-Prime Minister K.P. Sharma Oli raised this issue with President Xi Jinping during his visit to China in the second week of Bhadra. According to Foreign Secretary Amrit Bahadur Rai, Oli clearly stated that it was unacceptable for India and China to use Nepalese territory as a trade route and clarified that these territories belong to Nepal according to the Treaty of Sugauli of 1816.

A week after Oli returned from his visit, the Jyanji movement occurred in Nepal, leading to his resignation. Elections have now been completed in the country, and a government is about to be formed under the leadership of Balendra (Balen) Shah, a senior leader of the Rastriya Swatantra Party. He is scheduled to take the oath of office as Prime Minister on Chaitra 13. However, before he assumes office, India and China have already announced trade through Nepalese territory.