Trading with China

While the Chinese have been able to find an understanding with Nepal to simplify the procedure for non-tariff barrier items in the border trade between Tibet and Nepal, the situation is more difficult between India and China in Sikkim (Nathu-la).
On May 10, a report of The Sikkim Mail affirms: "The border trade between India and China that is being carried out since 2006 has been stalled from 4th May after the goods taken by the Indian traders were not cleared by the Chinese authorities at Nathu La border gate. The Chinese authorities allegedly told the Sikkimese traders that they do not recognize the list of items approved by the Indian government."
Since 2006, the border trade was going rather smoothly  and no custom duty was raised as per the bilateral agreement between India and China. 
The Sikkim Mail explains: "The Mart (Donqingang) in-charge of China side has informed the traders that they would impose tax per kilogram on the approved items which will be exported to China from India. The District Magistrate said that custom duties cannot be imposed on border trade items."
Apparently, the  Sikkim Government has not even been informed of the change of rules. The local District Magistrate has assured the traders that the matter will be taken by Commerce and Industries Secretary to the Ministry of External Affairs in Delhi. 
One more Chinese unilateral decision which will not help to smooth out the Sino-Indian relations.
Regarding Nepal, note the trade deficit in favour of China: "Nepal had a trade deficit of around Rs 42 billion with China in 2009-10 which was around Rs 31 billion during 2008-09, while the deficit was of around Rs 23 billion during 2007-08. During 2007-08, Nepali exports to China were worth less than a billion rupees."
Even if Nepal is able to sign an agreement with the Tibetan Autonomous Region, Kathmandu remains the looser. 
  
Meeting for simplification of trade between Nepal and Tibet ends
Trade panel to be deputed at border
HIMALAYAN NEWS SERVICE
2011-05-10
KATHMANDU: The second meeting of Nepal-Tibet Trade Facilitation Committee (NTTFC) decided to form a working committee at the border point for trade barrier simplification. “During the meeting representatives from both the countries agreed for the formation of a working committee that will actively work to solve trade related problems at the border,” said Binod Acharya, under secretary at Ministry of Commerce and Supplies (MoCS).
NTTFC meeting was organised on May 9-10. The two-day meeting was organised in Kathmandu and was led by joint secretary at the ministry Toya Narayan Gyawali and the visiting delegation was led by deputy secretary general of Government of Tibet Autonomous Region Ye Yinchuan. They also signed they also signed an MoU for Nepal-Tibet Trade Fair.
“As per the MoU, the trade fair will have around 50 stalls each from Nepal and China,” said Acharya. The trade fair will be organised for five days from November 2-6 in Kathmandu. The first Nepal-Tibet Trade Fair was organised in Tibet in September 2009 and after two years, the fair is being organised in Kathmandu. The first meeting of NTTFC was organised in Lhasa on April 21, 2010. The NTTFC meeting was very much positive on simplification of Nepal-China trade barriers, said Acharya.
The meeting was focused on trade related technical assistance and removal of trade barriers. “Representatives from Nepal and Tibet discussed the simplification of non-tariff barrier, encouragement to Chinese investment and increased Chinese technical assistance in Nepal,” said Acharya. Representatives from both sides discussed over the duty-free access different Nepali products.
“China has given duty-free access to 33 countries’ products including Nepal. However, traders here are unable to enjoy the facility of duty-free access,” he said adding that we also discussed about infrastructure development at customs points and simplification of language barriers at the border.
Nepal had a trade deficit of around Rs 42 billion with China in 2009-10 which was around Rs 31 billion during 2008-09, while the deficit was of around Rs 23 billion during 2007-08. During 2007-08, Nepali exports to China were worth less than a billion rupees.
However export to China increased to Rs 2.15 billion during 2008-09 while import was worth Rs 34.46 billion, said Gyawali. However exports to China dropped to Rs 1.38 billion with import increasing to Rs 43.44 billion. China mainly imports wheat flour, grain, coffee, vegetable fat, sugar, mix-juice, paints, painting, incense stick, statue, handicraft products, carpet, bricks, mattress from Nepal.