The intricacies of Nepal-China trade were scrutinized during a roundtable discussion titled "Nepal-China Trade: Prospects and Challenges," organized by South Asia Watch on Trade, Economics, and Environment (SAWTEE) and supported by The Asia Foundation. The ongoing trade challenges stemming from the aftermath of the 2015 earthquake and the global COVID-19 pandemic were discussed, emphasizing the need for immediate attention to affected Nepali products. The discussion further delved into transportation, connectivity, and logistical issues in both exports and imports.

According to a SAWTEE study on Nepal-China Trade, despite 90% of goods exported to China being covered by the zero-duty list for least developed countries (LDCs), the utilization of preferences averaged only 68% between 2020 and 2022. Mr. Rupesh Tha, Research Officer at SAWTEE, highlighted the necessity for Nepal to fully capitalize on zero-tariff treatment for over 8,000 Nepali products and diversify exports to China. Rabi Shanker Sainju, Former Joint Secretary, Ministry of Industry, Commerce and Supplies, Government of Nepal, attributed the trade deficit to high transportation costs resulting from inadequate logistics infrastructure. He stressed the importance of recognizing the evolving Chinese consumer market's demand for high-quality products.

Achyut Dhungana, Under Secretary, MOICS, Government of Nepal, identified four key factors for enhancing trade with China: infrastructure and logistics, negotiation and execution of trade agreements, market access, and cross-border payment facilitation. He revealed that discussions have begun to review and amend the trade and payment agreement between MOICS and the Chinese Ministry of Commerce.

Ashok Kumar Shrestha, Chairman, Nepal Trans Himalaya Border Commerce Association, emphasized trust-building between stakeholders of both countries and improving infrastructure, logistics, and connectivity. Ram Chandra Tiwari, Joint-Secretary, MOICS, Government of Nepal, addressed the incentive structure's lack of emphasis on supporting entrepreneurship and startups, leading to lackluster export performance. He noted the diminished collaboration under the federal system and its impact on resource utilization. Participants suggested comprehensive studies examining the impact on trade with China, existing tariff benefits, and alternative trade agreements to safeguard Nepal's trade with China.