Kathmandu [Nepal]: Experts have expressed worry about the implementation of the current trade agreement between Nepal and China, citing COVID-19 limits as a reason for Beijing’s ban on exports from Nepal for more than two years.

hina has agreed to provide duty-free treatment to goods of Nepali origin covering 98 per cent tariff lines, reported The Kathmandu Post.

According to the Nepal Trade Information Portal of the Ministry of Industry, Commerce and Supplies, China has been providing zero tariff treatment to about 8,000 goods originating in Nepal. These products account for 95 percent of Nepal’s exports to China.

“The question is about the implementation part. Why have Nepali exports to China fallen sharply?” said Shrestha. “And again, it is a matter of how serious the Chinese government will be in implementing the recent agreement.”

Nepal’s exports to China stood at a mere Rs 1 billion in the last fiscal year 2020-21 ended mid-July, while imports amounted to a staggering Rs 233.92 billion. The trade deficit with China amounted to Rs 232.90 billion in the last fiscal year, reported The Kathmandu Post.

Nepal’s main exports to China consist of incense sticks, handicraft (metal and wooden), noodles, pashmina, readymade garment, leather goods, rudraksha, tanned skin, tea, wheat flour and woollen carpet, among other products.

China is Nepal’s second largest trading partner, accounting for 14 per cent of its total trade. But Nepal suffers a huge deficit in its trade with its northern neighbour.

Moreover, the closure of the Chinese border since early 2020 has affected a large number of Nepali entrepreneurs exporting goods to China. China closed its border points due to the pandemic in January 2020, and they have not been fully operationalised.