China begins pressuring Nepal to sign $3 bn rail project


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By Manish Anand

New Delhi, December 19: With Nepal giving another fractured mandate, which will give the key to power to the Communist leader Pushpa Kumar Dahal, China has begun pressuring Kathmandu to approve $3 billion rail link. The Chinese embassy has gone in an overdrive to persuade the outgoing government to approve the feasibility study of Kerung-Kathmandu rail link.

With the Communist leaders in Nepal regularly visiting China, local media in the Himalayan nation are questioning the feasibility of the country signing a deal which will make the country take a loan from Beijing at a much higher rate to push Kathmandu into debt trap. The incumbent Prime Minister Sher Bahadur Deuba will again be taking the charge of the country, but his government will be dependent on the support of Dahal and other smaller parties.

Nepal has been part of the Belt and Road Initiative (BRI), which is a pet project of Chinese President Xi Jinping. Through BRI, global strategic experts have argued that China has taken over 60 countries in East and South Asia, Africa and Latin America into its dreaded debt trap, entailing the loanee nations to take more loans from Beijing at a higher rate to service the previous loans. Sri Lankan economy collapsed singularly because of the Chinese debt. Pakistan too is deep in Chinese debt. Similar attempts are being made on Nepal also.

Nepal trades with China principally at two border points – Kerung and Tatopani. Currently, the trade between two countries is taking place. Tatopani trade points is currently under restrictions. Traders in Nepal have suffered massive losses because of China restricting the trade on the pretext of the ‘Zero Covid Policy’, local media in Nepal have reported.

China is pushing Nepal to approve the Kerung-Kathmandu Rail Link, which was first mooted in 2006, and a section of the council of ministers in the ruling alliance is apparently pushing the government to accord speedy approval. However, the bureaucrats are holding out approval, arguing that the project is not at all in the national interest of Nepal, which comes at a huge cost of $3 billion, with loans from Beijing at high interest rate. Also, bilateral trade is skewed in favour of China.

India would need to keep a close eye on the Kerung-Kathmandu Rail Link project, as it will allow once completed a speedy access to India’s border with an all-weather infrastructure. Also, China may use Nepal to dump its goods in India by taking advantage of liberal Indian trade relations with Kathmandu. Sources in government accept that China is taking benefits of India’s trade pacts with friendly countries to dump goods in India by setting up shops in such nations.

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