In June 2020, <a href="https://timesofindia.indiatimes.com/india/border-row-dont-read-too-much-into-chinas-statements/articleshow/76056332.cms">incursions</a> by Chinese Army into the fraught borderlands of India’s Ladakh region triggered <a href="https://www.reuters.com/world/asia-pacific/what-was-india-china-military-clash-2020-about-2024-10-25/">bloody clashes</a> that killed 20 Indian soldiers, plunged bilateral relations to their lowest point in decades, and led to a prolonged military standoff. 
In November, China and India have reached a <a href="https://www.scmp.com/opinion/asia-opinion/article/3284373/how-china-and-india-can-build-border-truce-normalise-ties">truce</a>, though many in India would prefer to hold their applause. Since the 2020 violence, bilateral relations have remained frozen, and India wants China to take steps to restore the status quo ante at the border. China’s unprovoked encroachments across the Line of Actual Control (LAC) in eastern Ladakh are to blame for disturbing the peace in the first place.
To show it meant business, India <a href="https://www.bloomberg.com/opinion/articles/2024-10-23/china-and-india-bury-the-hatchet-for-now">slowed down</a> approvals of Chinese investments; tightened visa approvals for Chinese nationals, and canceled direct flights between the two countries. India toughened its stance on Chinese territorial claims in the Pacific, and made pointed political gestures that were bound to displease China, like <a href="https://m.economictimes.com/news/india/china-lodges-protest-with-india-over-pm-modis-response-to-taiwan-president-lais-greetings-on-his-poll-victory/articleshow/110765182.cms">responding</a> warmly to the Taiwanese president’s congratulatory message after Modi’s re-election. (There was also talk of Taiwan allowing Indian workers.)
While the recent truce suggests that China has finally gotten the message, it is difficult to shake the impression that India was the more anxious of the two parties to reach an agreement. In fact, India’s economic establishment appears largely convinced that, far from pursuing a strategy of decoupling, or at least ‘de-risking’, vis-à-vis China, India should be using Chinese capital to fill its own investment gaps.
Given that bilateral trade has <a href="https://www.ptinews.com/story/business/China-largest-trading-partner-of-India-in-FY24-with-USD-118-4-bn%3B-US-second-with-USD-118-3-bn/1497275">reached</a> its highest-ever levels despite the political tensions, it comes as no surprise that India’s business community has reportedly been <a href="https://www.bloomberg.com/news/newsletters/2024-10-24/how-india-ceos-convinced-modi-to-push-for-better-china-ties-at-brics">pressing</a> the government to conclude an agreement that would facilitate economic engagement. In July, the government’s chief economic adviser <a href="https://www.reuters.com/world/india/india-not-rethinking-issue-allowing-chinese-investment-trade-minister-says-2024-07-30/">openly advocated</a> a strategy that would increase Chinese investments in India and deepen Indian integration into Chinese supply chains.
There were indications over the last few months that an agreement to end the Ladakh standoff was forthcoming. And a deal did soon emerge, allowing both China and India to resume patrols along the frontier.
But significant areas of concern remain. As the political commentator Brahma Chellaney observed, when Narendra Modi and Xi Jinping met at the BRICS Summit in Kazan after the truce was announced, their respective ministries produced very different statements. Whereas India described the accord as a step toward a ‘multipolar Asia and a multipolar world’, China referred only to a ‘multipolar world’. The implication was subtle but clear: Asia belongs to China.
More broadly, China’s actions along the LAC have signaled a clear desire to keep India off balance by taking steps to shift the border in ways more favourable to its own interests. This mirrors China’s assertive approach to advancing its territorial ambitions elsewhere along its shared border with India, and in the South China Sea.
It is worth remembering how the last standoff between India and China, focused on the Doklam plateau in Bhutan, ended. India does not claim Doklam, but it does support Bhutan’s claim, which China disputes. Moreover, a major Indian highway runs below the plateau, connecting India’s northeastern states to the rest of the country. So, when China deployed troops to build a Chinese highway in Doklam, India sent troops to stop the project.
In that case, the two sides took just a few months to reach an agreement, which looked much like the recent Ladakh deal. Since then, however, the Chinese outflanked India by building a road elsewhere on the Doklam plateau to achieve the same result. The PLA now overlooks a vital Indian highway.
China’s conduct follows a clear pattern: create new facts on the ground, deploy forces to positions from which they can intimidate (and, potentially, attack) India, and wear India down with protracted diplomacy. In the meantime, encourage India to increase its dependence on Chinese imports and dangle the investment carrot before Indian business leaders.
Yet the promised economic benefits of the two sides’ recent rapprochement are unlikely to materialise. The Chinese have not lifted a finger to address India’s huge bilateral trade deficit which soared to $101 billion in 2022, from $70 billion in 2021 – or to lower the barriers Indian companies face when trying to access the Chinese market.
Moreover, all indications point to Chinese investment in low-value-added industries, rather than sectors involving technology transfer, even as Chinese companies pursue acquisitions in sensitive sectors in India. There are also massive opportunity costs: greater economic integration with China would surely make India less attractive to global companies seeking to reduce their exposure to the People’s Republic.
Add to that China’s long track record of exporting its way out of economic trouble and weaponising other countries’ economic vulnerabilities, and it seems clear that India should proceed with caution. Until China credibly demonstrates its good intentions, the truce in Ladakh warrants little celebration. © <a href="http://www.project-syndicate.org">Project Syndicate</a>

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CHINDIA

For a moment after landing at Leh airport, Nepalis can be forgiven for thinking they have just arrived in Jomsom.&nbsp; The drive into the capital of India’s Union Territory of Ladakh situated at 3,500m offers many other similarities: the arid terrain, surrounding snow-capped peaks, prayer flags fluttering everywhere, chortens and stupas.&nbsp; Although situated on the western edge of the Himalaya, it is as if the geology, culture, language and religion of Mustang leapfrogged 1,500km over northern India to transplant itself here.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20240712040752_d8137187d6634badae56afc915bab7aa6bf07be0ba2f7b0ad8497c24d18fe3cc.jpg" data-media-id="editor_0" data-image-id="20240712040752_d8137187d6634badae56afc915bab7aa6bf07be0ba2f7b0ad8497c24d18fe3cc" data-rendition-name="original" width="794" height="583" loading="lazy" alt="Ladakh's Nepal links Page 6-7 NT #1220"> </figure>  Pangong Tso stretches 160km to the east into China, and could be mistaken for Phoksundo in Dolpo, except that at 4,300m it is the world’s highest salt-water lake. A 30 minute drive south of Leh is Shey Gomba, a namesake of a similar-looking monastery in Dolpo. This ancient palace and shrine has two gilded copper statues of the sitting Buddha which were crafted by Nepali artisans that Ladakh’s King Delden Namgyal brought over from Nepal 400 years ago.&nbsp; One of the statues is 8m tall and has the name of the Nepali sculptor, Sanga Zargar Wanduk, inscribed on it. Legend has it that 8kg of gold and 120kg of copper were used and the statue took 20 years to make.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20240712040752_47bde3afa140d19c310556d68848c0842ca3b102c89b1c8217fb5b2db1a07bcd.jpg" data-media-id="editor_1" data-image-id="20240712040752_47bde3afa140d19c310556d68848c0842ca3b102c89b1c8217fb5b2db1a07bcd" data-rendition-name="original" width="1280" height="960" loading="lazy" alt="Ladakh's Nepal links Page 6-7 NT #1220"> <figcaption>Head monk Jigden of Shey Gompa with the 400-year-old gilded Buddha made by Nepali artistans.</figcaption> </figure>  “As far as we know, in 1655 Deldan Namgyal asked the King of Kathmandu to send the artisans to build the two statues to honour his father, King Sengge Namgyal,” head monk Jigden told us.&nbsp; Thirty Nepali metalsmiths were brought to Ladakh, and after completion of the work they settled down near the Shey monastery after King Deldan gave them property. Others were offered farmlands 35km away in Chiling, and some in Chemde. We tracked down one of the descendants of the original Nepali artisans. Phunchuk Dorje, 52, is a goldsmith with a shop inside a warren of narrow alleys in Leh.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20240712040752_9185d110c94bbd30383272cb4f74082b4749fb55b6ea3bbdf024cfa0b2d2b26e.jpg" data-media-id="editor_2" data-image-id="20240712040752_9185d110c94bbd30383272cb4f74082b4749fb55b6ea3bbdf024cfa0b2d2b26e" data-rendition-name="original" width="1333" height="1000" loading="lazy" alt="Ladakh's Nepal links Page 6-7 NT #1220"> <figcaption>Phunchuk Dorje (left) whose artisan ancestors were brought from Nepal to make the Shey Buddha.</figcaption> </figure>  “Yes, my ancestor was the chief artisan who was brought from Nepal by the King of Ladakh to make the Buddha statues, but he and others stayed here,” says Dorje, who went to Nepal with his grandfather and father in 1990 to trace his forebear’s family and home village, and thinks they came from Solu. But Dorje did manage to find old ledgers where his grandfather's name was still entered as ‘Pambar Sunar’. Sunar is a Nepali occupational surname for a goldsmith. It was his father who took up the name Dorje, and he adopted a local Tibetan name. In Ladakh, the descendants of Nepali craftsmen are still called ‘Shergar’, which also means goldsmith, and the craft seems to have been passed down over the generations to Dorje. Dorje says he is both a Hindu and Buddhist, worshipping Ganesh, the Buddha and revering the Dalai Lama. In his altar at home, Dorje has a small bronze Ganesh that his grandfather brought from Nepal, and he now regards it as his family’s patron deity.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20240712040752_bd74346e403b2567ead2c0944e0ea844873a8c9089073223c718d7ea116cb9b3.jpg" data-media-id="editor_3" data-image-id="20240712040752_bd74346e403b2567ead2c0944e0ea844873a8c9089073223c718d7ea116cb9b3" data-rendition-name="original" width="1500" height="1125" loading="lazy" alt="Ladakh's Nepal links Page 6-7 NT #1220"> <figcaption>Thiksey Monastery near Lah that is also called the 'Mini Potala'</figcaption> </figure>  Dorje’s father worked for the Indian Army, and once, after he became very ill, doctors gave up on saving his life and asked the family to take him home. Dorje prayed fervently to Ganesh, and says that within a week his father got well.&nbsp; Four hundred years after his forefather came to Ladakh, Dorje says he still has a strong attachment to the land of his ancestors, and has married a Nepali-speaking woman. Fascinated that Nepali visitors have come to see him, he confesses: “I have this strange fixation on finding out where exactly in Nepal my ancestors came from. If I had more money I would go to Nepal again on a search mission.” &nbsp; History and geography  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20240712040752_52491e995b4858eb7665d54e55b6277508a4dc80cb70deb3dc332e955d58953a.jpg" data-media-id="editor_4" data-image-id="20240712040752_52491e995b4858eb7665d54e55b6277508a4dc80cb70deb3dc332e955d58953a" data-rendition-name="original" width="801" height="606" loading="lazy" alt="Ladakh's Nepal links Page 6-7 NT #1220"> </figure>  Like Mustang, Ladakh is in the trans-Himalayan plateau. Only one third of the territory is today under Indian administration after the Aksai Chin region was annexed by China in the 1962 war. Pakistan controls the western half of Kashmir that includes parts of Ladakh. These are still volatile borders, which is why there is a strong Indian military presence in the strategic mountainous territory. At least 20 Indian and four Chinese soldiers were killed in clashes in 2020-21 between Indian and Chinese troops in Galwan, north of Leh.&nbsp; The 3-month battle in Kargil in July-September 1999 between India and Pakistan was serious enough to be called the Kargil War in which more than 1,000 soldiers were killed on both sides. &nbsp; &nbsp;Many of those who died in various wars against Pakistan and China were Gorkha soldiers from Nepal well acclimated for mountain warfare in high terrain. They were posthumously honoured with gallantry medals, and their names and photos are displayed in the Hall of Fame, 10km from Leh. Some of them: Dying away from home Major Hari Chand engaged Pakistani troops at elevations of 5,500m in 1948 and helped India gain control of Leh. He was awarded the Mahavir Chakra medal for gallantry.&nbsp; &nbsp;Lt Col Dhan Singh Thapa fought till the end against Chinese troops in October 1962. &nbsp;&nbsp;&nbsp;&nbsp; Second Lieutenant Min Bahadur Gurung fought alongside Lt Col Thapa and charged a Chinese mortar position, destroying it before being killed. He was posthumously promoted to Lt Col, awarded India’s highest medal for valour, the Param Vir Chakra. A border post on the western shore of Pangong Tso &nbsp;was named after him.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20240712120740_8b82d1a558674dbff7b8b849f1808781610049e62d8be9f8474a6696094ee893.jpg" data-media-id="editor_5" data-image-id="20240712120740_8b82d1a558674dbff7b8b849f1808781610049e62d8be9f8474a6696094ee893" data-rendition-name="original" width="1500" height="1350" loading="lazy" alt="Ladakh's Nepal links Page 6-7 NT #1220"> </figure>  Lance Corporal Rabi Lal Thapa was awarded the Mahavir Chakra for saving an Indian unit from Chinese attacks in Ladakh in October 1962. Capt Manoj Pandey was awarded the Param Vir Chakra. He was killed in Kargil in July 1999. Other Nepalis were awarded Mahavir Charka for bravery in various other battles since 1948 against Pakistani and Chinese troops: Maj Rajesh Adhikari, Lance Corporals Prem Gurung and Nara Bahadur Ale. But today, it almost seems as if there are more tourist buses than military vehicles and more tourists than soldiers in Ladakh. Indian visitors ‘discovered’ Ladakh after the 2009 Bollywood hit The Three Idiots was filmed at Pangong Tso, and in 2012 Jab Tak Hai Jaan was shot on location in Ladakh. <h2>“It will be difficult to run Ladakh’s businesses without Nepalis.”</h2>  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20240712040752_64be609bc0849669edb4642090d9d469eea2866728722d123e50ac512d03b753.jpg" data-media-id="editor_6" data-image-id="20240712040752_64be609bc0849669edb4642090d9d469eea2866728722d123e50ac512d03b753" data-rendition-name="original" width="1333" height="1000" loading="lazy" alt="Ladakh's Nepal links Page 6-7 NT #1220"> <figcaption>Chandra Ghising from Sindhuli has been working in Leh for 15 years.</figcaption> </figure>  The Tibetan Kitchen in Leh is open from noon till midnight, but is so busy that entry is only allowed with table reservation. The restaurant is run entirely by 36 Nepalis from managers and chefs to waiters. “There is no other reason we are so popular, we have the best food,” says manager Gyan Pun Magar simply. “Just look at that line outside.” &nbsp;In the town of Merak near the Chinese border, the Grand Himalayan Hotel is also run entirely by Nepalis.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20240712060732_3cf3463d10ee8946f93d16606008300ba8f52a8fe18f7df68d2730075fcbfde1.jpg" data-media-id="editor_7" data-image-id="20240712060732_3cf3463d10ee8946f93d16606008300ba8f52a8fe18f7df68d2730075fcbfde1" data-rendition-name="original" width="1750" height="2333" loading="lazy" alt="Ladakh's Nepal links Page 6-7 NT #1220"> <figcaption>Gyan Pun Magar, Nepali manager of the Tibetan Kitchen.</figcaption> </figure>  “Ladakh would still be here without Nepalis, but it would be difficult to run businesses here without us. From soldiers to cooks to rafting guides, we run everything,” says Rana Bahadur Pandey, who runs a bakery and migrated here from Nuwakot 25 years ago. Indeed, a new Buddhist stupa being constructed on the outskirts of Leh is being built almost entirely by Nepalis, just like their ancestors who sculpted the gilded Buddhas of Shey Monastery 400 years ago.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20240712040752_69bb0881c82b011126212f7c183846e63071a074f590b98dd26a7d36f5357bf9.jpg" data-media-id="editor_8" data-image-id="20240712040752_69bb0881c82b011126212f7c183846e63071a074f590b98dd26a7d36f5357bf9" data-rendition-name="original" width="1333" height="1000" loading="lazy" alt="Ladakh's Nepal links Page 6-7 NT #1220"> <figcaption>Milan Pathak (in orange) and fellow rafting guides from Nepal on the Zanskar River.</figcaption> </figure>  Along the highway from Leh to Pangong, Siddhi and Sujit Pariyar from Jumla are selling herbs and aromatic oils to tourists. There are 15 others from Jumla selling Nepali herbal products who spend summers here, and return home to their families for Dasain with their earnings. “When the monsoon off-season stops trekking, mountaineering and rafting in Nepal, we move to Ladakh,” says Milan Pathak, a rafting guide. Like others, Pathak runs white water on the Kali Gandaki, Bhote Kosi and Trisuli back home, and comes here for three months to raft on the Zanskar River, a tributary of the Indus. They head back in September at the start of the autumn rafting season in Nepal. The Zanskar River runs about 200km before it joins the Indus and the Nepali guides offer day trips of 35km, or half-day packages of 14km. &nbsp;

Ladakh’s Nepal links

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109141132/636babe59c7e80680e077f01jpeg.jpg" alt="" width="987" height="511"/><figcaption>The India-China border flashpoints in the Himalaya are hotspots in more ways than one. The latest clashes threaten to derail cooperation on climate change between two countries that have the world's biggest carbon footprints.</figcaption></figure>One of the casualties of the strain in relations between India and China will be the cooperation between the two of the world’s most populous countries on the climate crisis.After the <a href="https://www.nepalitimes.com/opinion/view-of-galwan-from-bhutan/" target="_blank" rel="noopener noreferrer">violent clash on Galwan Valley in Ladakh</a> on 15 June that left at least 20 Indian soldiers dead, the two countries have been taking tit-for-tat economic action against each other. The latest was India’s ban on 50 Chinese apps, including TikTok which had at least 125 million users in India.After a brief period in the 1950s of ‘Hindi-Chini Bhai Bhai’ bilateral bonhomie under Mao Zedong and Jawaharlal Nehru, things have not been the same. There is economic competition and there have been major border confrontations since the 1962 Himalayan war.Under Prime Minister Narendra Modi and President Xi Jinping, Sino-Indian relations had actually improved with the two leaders having met multiple times since Modi came to power in India in 2014.Modi’s visit to Xian in 2015 saw a breakthrough in bilateral relations, with the <a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__southasianvoices.org_india-2Dand-2Dchina-2Dfrom-2Dpolitical-2Ddifferences-2Dto-2Deconomic-2Dsimilarities_&amp;d=DwMFaQ&amp;c=slrrB7dE8n7gBJbeO0g-IQ&amp;r=7k-SLurfVGd6ue7b1xrHgg&amp;m=H9GhrTj_2jGmOawKuU1gRp-_CL6hWK9-HdamIhGuL_o&amp;s=zEqnZMnVgge9Vp_ANwzx7Kxt-8J4K-RkMaX1KTy1ypE&amp;e=">signing</a> of 24 agreements ranging from economic and infrastructure development and military co-operation. Among the agreements signed were the ‘Memorandum of Understanding on Co-operation in Ocean Sciences, Climate Change and Cryosphere’ and the ‘MoU on Co-operation in Earthquake Science and Engineering.But even while the two sides seem to have taken measures to de-escalate tensions along their disputed border, a new cold war has set in over the Himalaya just a time when the mountain range is thawing because of the impact of climate change.The International Centre for Integrated Mountain Development (ICIMOD) in its ‘<a href="https://www.nepalitimes.com/banner/a-terrifying-assessment-of-himalayan-melting/" target="_blank" rel="noopener noreferrer">Himalayan Assessment</a>’ last year said that one-third of the ice on the Himalaya would be gone by 2050 and two-thirds by the end of the century if measures are not taken to cut global emissions.Although the specific details of the Xian MoUs between India and China are not available, they were taken as positive signs in that both countries recognise the climate crisis to be a pressing challenge in the region in the coming years. It was also an indirect acknowledgement of the fact that the two countries together produce one-third of global greenhouse gas emissions – China 28% and India 7%.But both countries also share common climate vulnerabilities such as depleting water resources, weather extremes resulting in floods and droughts, extreme heat stress, and rising sea levels. Ironically, the very mountainous border both are fighting over is also Asia’s water tower, and <a href="https://www.nepalitimes.com/banner/the-third-pole-is-warming-faster-than-expected/" target="_blank" rel="noopener noreferrer">Himalayan glaciers</a> are the source of major rivers in India, China, and the rest of Asia.The China–India agreements on climate change were perhaps the strongest agreements and bilateral networks between the two countries and provide a salient case study on what the future of collaboration between China and India could look like.In 2001, the United States withdrew from the Kyoto Protocol, much like its withdrawal from the Paris Climate Agreement in 2016. Both led to a vacuum in international climate governance. With help from the European Union, China and India negotiated through the BASIC Group (Brazil, South Africa, India, and China) to come up with a joint climate agenda.Before the <a href="https://urldefense.proofpoint.com/v2/url?u=http-3A__archive.nepalitimes.com_news.php-3Fid-3D16428&amp;d=DwMFaQ&amp;c=slrrB7dE8n7gBJbeO0g-IQ&amp;r=7k-SLurfVGd6ue7b1xrHgg&amp;m=H9GhrTj_2jGmOawKuU1gRp-_CL6hWK9-HdamIhGuL_o&amp;s=GefS1VCcGSBnLD_CrmPlX43Y1MuRNDwnJ9XNz2-f8UY&amp;e=">Conference of Parties (COP15) negotiations in Copenhagen</a>, China and India took early steps to develop more coordination within the group to come up with a common position that would serve their national interests. In 2009, the two countries <a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__www.tandfonline.com_doi_abs_10.1080_10220461.2011.622945&amp;d=DwMFaQ&amp;c=slrrB7dE8n7gBJbeO0g-IQ&amp;r=7k-SLurfVGd6ue7b1xrHgg&amp;m=H9GhrTj_2jGmOawKuU1gRp-_CL6hWK9-HdamIhGuL_o&amp;s=_Ldw6R-NfoiWh_1NZaJWbnuqa1TeaSk5fLOvkGIVJZ4&amp;e=">met</a> in Beijing to sign an agreement to coordinate their approach to climate negotiations.In Copenhagen in 2009, the BASIC Group got a boost by being recognised as a negotiation group of emerging economies. Its members were hailed for salvaging the conference by brokering the Copenhagen Accord with the United States at the very last minute despite criticism of leading a non-transparent and exclusionary decision-making process.However, tensions soon emerged within the BASIC group. While India was praised for the newfound role of a mediator, China was seen as a bully in climate negotiations by the international community. The two countries also differed their own positions on points like emissions reduction targets and peaking of emissions.Things started going downhill after that. In 2014, President Xi signed a joint climate agreement with then President Obama which formalised the rift between India and China. As a response to China’s joint agreement with the US, Prime Minister Modi <a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__economictimes.indiatimes.com_news_politics-2Dand-2Dnation_obama-2Din-2Dindia-2Dpm-2Dnarendra-2Dmodi-2Dbarack-2Dobama-2Dstrike-2Dalliance-2Don-2Dclimate-2Dchange-2Dair-2Dpollution-2Drenewable-2Denergy-2Dfocus-2Dareas_articleshow_46016108.cms-3Ffrom-3Dmdr&amp;d=DwMFaQ&amp;c=slrrB7dE8n7gBJbeO0g-IQ&amp;r=7k-SLurfVGd6ue7b1xrHgg&amp;m=H9GhrTj_2jGmOawKuU1gRp-_CL6hWK9-HdamIhGuL_o&amp;s=jOu4w8J5xVH_d7OkpM_aZ2oTh9lQd4MHEv-A6rKTxi4&amp;e=">said</a>: “India will not be arm-twisted into climate action going against its national interest just on account of other countries.”Although China and India presently do not have any official alliance on climate, they continue to share large carbon emissions profiles, vulnerabilities to climate change, and the common interest for energy-resilience.The energy sector in both countries is following similar trajectories. China is the largest greenhouse gas emitter in the world, with India at number 3 behind the United States. China’s carbon emission from the energy sector is expected to decline after peaking in 2030, while India is taking action to curb coal consumption and the associated problem of air pollution. The two countries also have a shared interest in reducing their dependence on imported fossil fuels and to promote national energy security.To do so, solar energy has emerged as a key interest in both countries. China is now the largest manufacturer of solar systems in the world. India has also <a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__onlinelibrary.wiley.com_doi_abs_10.1111_1758-2D5899.12550&amp;d=DwMFaQ&amp;c=slrrB7dE8n7gBJbeO0g-IQ&amp;r=7k-SLurfVGd6ue7b1xrHgg&amp;m=H9GhrTj_2jGmOawKuU1gRp-_CL6hWK9-HdamIhGuL_o&amp;s=mkdMtvidoqWthvwS-Qgk7P3_bl8sCeFwW-RNi76U5Ls&amp;e=">pursued</a> policies promoting initiatives like the International Solar Alliance, and to drive down the costs of solar power and increase its share in the energy grid.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109141132/636babe79c7e80680e077f02jpeg.jpg" alt="" width="1047" height="627">China is India’s second-largest trading partner, and building an alliance to promote the diffusion of technology across both countries and to learn from each other brings a win-win situation for both countries. It remains to be seen how much impact the current bilateral tension will have on trade.The 2019 meeting between President Xi and Prime Minister Modi <a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__www.nepalitimes.com_latest_political-2Dgeography-2Dof-2Dindia-2Dnepal-2Dchina-2Dties_&amp;d=DwMFaQ&amp;c=slrrB7dE8n7gBJbeO0g-IQ&amp;r=7k-SLurfVGd6ue7b1xrHgg&amp;m=H9GhrTj_2jGmOawKuU1gRp-_CL6hWK9-HdamIhGuL_o&amp;s=oirjoEgzy256RbHnATPQeb4OKgya3bAc9C5jRioq3dc&amp;e=">in Chennai</a>, just before Xi <a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__www.nepalitimes.com_banner_what-2Dis-2Dxi-2Djinpings-2Dbig-2Dsurprise_&amp;d=DwMFaQ&amp;c=slrrB7dE8n7gBJbeO0g-IQ&amp;r=7k-SLurfVGd6ue7b1xrHgg&amp;m=H9GhrTj_2jGmOawKuU1gRp-_CL6hWK9-HdamIhGuL_o&amp;s=H7Gu_6O6J0tXHn0cACUsEUV1Y1ZezQ98gsaq-TkvCkM&amp;e=">flew to Nepal</a>, had generated tangible results and was <a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__www.chinadailyhk.com_articles_187_234_97_1571201543459.html&amp;d=DwMFaQ&amp;c=slrrB7dE8n7gBJbeO0g-IQ&amp;r=7k-SLurfVGd6ue7b1xrHgg&amp;m=H9GhrTj_2jGmOawKuU1gRp-_CL6hWK9-HdamIhGuL_o&amp;s=IrdTk6LcChKRTTg3OLR3rspvQUzxa2MrPrrtfnpLiR8&amp;e=">supposed</a> to have opened a new chapter in bilateral relations. The informal meeting mechanism had also provided an opportunity to put territorial disputes aside to <a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__southasianvoices.org_india-2Dand-2Dchina-2Dfrom-2Dpolitical-2Ddifferences-2Dto-2Deconomic-2Dsimilarities_&amp;d=DwMFaQ&amp;c=slrrB7dE8n7gBJbeO0g-IQ&amp;r=7k-SLurfVGd6ue7b1xrHgg&amp;m=H9GhrTj_2jGmOawKuU1gRp-_CL6hWK9-HdamIhGuL_o&amp;s=zEqnZMnVgge9Vp_ANwzx7Kxt-8J4K-RkMaX1KTy1ypE&amp;e=">focus</a> on bilateral relations given common challenges like climate change.Despite the media war between the two countries over the current border clash, it is in the national interest of both countries to increase collaboration in trade, climate action, and other issues – especially as the world plunges into a recession caused by the <a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__www.nepalitimes.com_here-2Dnow_the-2Dclimate-2Dconnection-2Dto-2Dcovid-2D19_&amp;d=DwMFaQ&amp;c=slrrB7dE8n7gBJbeO0g-IQ&amp;r=7k-SLurfVGd6ue7b1xrHgg&amp;m=H9GhrTj_2jGmOawKuU1gRp-_CL6hWK9-HdamIhGuL_o&amp;s=GP_3RzYeaWUVZtOLjy8k7uFbGrXHgpUmGGHuZH6H1Ik&amp;e=">COVID-19</a> pandemic.It could be this realisation that prompted Modi’s downplaying of the crisis by <a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__www.hindustantimes.com_india-2Dnews_chinese-2Dtroops-2Ddid-2Dnot-2Denter-2Dour-2Dterritory-2Dsays-2Dpm-2Dmodi-2Dat-2Dall-2Dparty-2Dmeeting-2Don-2Dladakh-2Dstandoff_story-2DQGgGUyL3sVRYB7mp3Y8bBI.html&amp;d=DwMFaQ&amp;c=slrrB7dE8n7gBJbeO0g-IQ&amp;r=7k-SLurfVGd6ue7b1xrHgg&amp;m=H9GhrTj_2jGmOawKuU1gRp-_CL6hWK9-HdamIhGuL_o&amp;s=RIRMrA_GMmSKg7m5qcAfROA_BMHG8mgK_FvSVIso3zQ&amp;e=">suggesting</a> that the “Chinese neither entered our territory nor has any post been taken over by them.”<a href="https://www.nepalitimes.com/here-now/the-climate-connection-to-covid-19/">Rastraraj Bhandari </a>is pursuing a Masters in Economics and China Studies at the Yenching Academy of Peking University in Beijing.

Right climate for India-China talks on climate change

<h2>Tibet’s Muslims settled in Nepal in waves, but they all have one thing in common: Ramadan</h2><figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107101156/6368d6d79c7e80680e0314aajpeg.jpg" alt="" width="1500" height="1000"/><figcaption>Ahmed Dulla with his 20 month old daughter Meherin, enjoying his iftar meal after fasting all day. Pic: Bikram Rai</figcaption></figure>Mention Tibet, and the first thing that comes to mind is the Dalai Lama and Buddhism. However, Muslims have been as much a part of the fabric of Tibetan culture as their Buddhist counterparts.It is hard to distinguish <a href="http://archive.nepalitimes.com/article/Nepali-Times-Buzz/Tibetan-muslims-celebrate-ramadan,1505" target="_blank" rel="noopener">Muslim Tibetans</a> from their Buddhist compatriots since they share the same language, food, clothing, culture and heritage. Tibetan Muslims have also contributed to the preservation of Tibetan culture wherever in the world they have settled. It is only their faith that sets them apart.Historically, Muslim traders from Kashmir and Ladakh settled in Tibet in the 17th century, during the time of the fifth Dalai Lama. They were granted permission to build mosques and have burial ground along with other privileges such as being able to buy land and continue their trade. They started marrying Tibetan Buddhist women, who later converted to Islam. As the community expanded, it later included Tibetans of Nepali origin.Lhasa still has four mosques, the first of which Bada Masjid was built in 1716 with a smaller one built in the 1920s. The remaining two mosques are in Gyangda Linka, where the burial ground is located. There are two more mosques in Xigatse and Changdu.Tibetan Muslims in Lhasa were always allowed to freely practice their religion. But after the Chinese annexation in 1950, most Muslims migrated to Nepal and lndia with the Dalai Lama and other Tibetans.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107101156/6368d6da9c7e80680e0314abjpeg.jpg" alt="" width="1500" height="1000"><figcaption> </figcaption></figure>“Business was always good in Tibet, and it was booming even during the Cultural Revolution. The political tension did not hamper our trade, but we moved out of Tibet because of concern for our religion,” recalls Abdul Rehman (pictured above), 68, who was born in Lhasa but moved to India in the 1960’s. After university, he moved to Kathmandu 28 years ago to start his own jewellery business in Thamel.Returning from the afternoon prayers at Jame Masjid, as he settled down in his antique jewellery boutique, Rehman echoed the feeling of most Tibetan Muslims in Nepal: "In all these years, I have never ever been made to feel like an outsider here in Nepal. The tourist business is good, and the people too are very friendly."There are about 120 Tibetan Muslim families in Kathmandu, of which some like Rehman are of Kashmiri ancestry who moved to Kathmandu for trade and business. Tibet, Nepal and India have always shared a special connection because of interlinked trade which translated into new communities such as Tibetan Muslims who trace their ancestry mainly to Kashmir and Ladakh.Tibetan Muslims in Nepal are further categorised as 'Khache' (from Kashmir and hold Indian passports) and 'Khazar' (who have Nepali ancestry and nationality). The only difference between the two is that the Khache regard the Dalai Lama as the Tibetan leader and mark his birthday. Most of them have now intermarried, blurring the distinction between the two.<a href="http://archive.nepalitimes.com/article/Nepali-Times-Buzz/Dulla%20,345" target="_blank" rel="noopener">Ahmed Dulla</a>, 30, born in Nepal, belongs to the ninth generation of Tibetan Muslims. His family moved from Lhasa to Kathmandu in the 1970's, because their ancestors were from Nepal. Dulla studied in India and returned eight years ago to start a shoe business. His wife Bushra Yusuf is a Tibetan Muslim of Kashmiri ancestry.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107101156/6368d6dd9c7e80680e0314acjpeg.jpg" alt="" width="640" height="427"><figcaption> </figcaption></figure>"We Tibetan Muslims have relatives all over. We still have family in Lhasa, Ladakh, Kashmir, and in Kalimpong and Darjeeling. It is only geographically that we are apart, otherwise we are all the same, culturally and religiously," Dulla tells us.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107101156/6368d6e09c7e80680e0314adjpeg.jpg" alt="" width="640" height="427"><figcaption> </figcaption></figure>Dulla's uncle Karimullah, 55, was born in Lhasa and moved to Kathmandu in 1969. His grandfather was a Nepali Hindu who worked at the Nepal Consulate in Lhasa, and grandmother was a Nepali Buddhist. They both converted to Islam while in Tibet and mingled with the Tibetan Muslim community.Despite being a small group, Kathmandu’s Tibetan Muslims are a strong, tightly-knit community who this month are observing Ramadan like Mulsims all over the world, not eating all day and breaking their fasts after sundown with a feast."The purpose of Ramadan is to purify your thoughts and have control over yourself. It helps bring self awareness within us," says Dulla as he breaks his fast with customary dates, followed by a great variety of kebabs, curries and desserts like sewai and kheer.Read also: <a href="http://archive.nepalitimes.com/news.php?id=19550#.Wwb7_TSFN0w" target="_blank" rel="noopener">Ramzan Kareem</a><a href="http://archive.nepalitimes.com/news.php?id=2047#.Wwb7lDSFN0w" target="_blank" rel="noopener">Nepali Muslims</a><a href="http://archive.nepalitimes.com/article/nation/assimilating-generations-of-Newari-muslims,2937" target="_blank" rel="noopener">How to braid two cultures together</a>

There are Muslims in Tibet, too

The monsoon has got bad press because Nepal’s tourism operators actively told visitors to avoid <a href="https://nepalitimes.com/opinion/managing-the-monsoon?%2F">the rainy season</a>. It is time to change that. The reason can be found right here in the vast alpine meadows of Central Nepal where this time of year you can walk on velvet grass of pastures abloom with delicate pink, red and yellow flowers as the mist rolls up the valley. There is no sound except the hum of bumble bees. &nbsp;&nbsp; There are dozens of places across high Nepal called Chaurikharka, which means yak pasture. But this particular Chaurikharka in Rukum East located at an altitude of 4,000m stands out for its serene beauty, rustic charm and bucolic setting. There is just the occasional chime of <a href="https://nepalitimes.com/here-now/when-yaks-go-so-does-culture">yak bells</a> in the distance, and the sharp whistle of herders corralling sheep. &nbsp;&nbsp; The grass shoots are so fragile that one hesitates to step on them, the rounded ridges appear and quickly vanish in waves of mist. With the<a href="https://nepalitimes.com/here-now/before-the-next-monsoon"> arrival of monsoon</a>, these meadows are a soothing shade of green dotted with millions of <a href="https://nepalitimes.com/review/the-anatomy-of-a-flower?%2F=">multi-coloured flowers</a>. Until very recently, it took a week or so to hike up to places like Chaurikharka, but with the expansion of the road network even to these far-flung mountains in the lap of Dhaulagiri, they are much more accessible. It is just a three-hour uphill from the Mid-Hill Highway on the border between Baglung and Rukum East.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250802130828_a0b06b494d751b2144ffbbf10894ea64b29e8aed844bc8c66171783abfaf4e16.jpg" data-media-id="editor_4" data-image-id="20250802130828_a0b06b494d751b2144ffbbf10894ea64b29e8aed844bc8c66171783abfaf4e16" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="Visit Nepal in the monsoon"> </figure>  Purists would say that such easy access devalues the sanctity of these remote high meadows, but it also means more people will be moved to treasure the experience, appreciate <a href="https://nepalitimes.com/banner/natures-fragile-gift-to-nepal">the value of nature </a>so they can take steps to protect it.&nbsp; To be sure, the <a href="https://nepalitimes.com/here-now/deadly-monsoon-in-nepal-turns-deadlier">monsoon season can be challenging for road travel</a>. The roads are rough even at the best of times, and in the monsoon they become muddy and treacherous, often blocked by<a href="https://nepalitimes.com/news/monsoon-deluge-in-nepal"> landslides</a>. But that could be precisely the kind of adventure that the more intrepid visitors crave. Improved road connectivity has already made Chaurikharka and places like Badimallika &nbsp;and other sacred lakes in the mountains of western Nepal popular with domestic tourists. What is driving this traffic is the urge to go to exotic new places and share videos and selfies on social media. Several of Nepal’s travel vloggers have visited Chaurikharka and popularised the place, enticing followers on TikTok or YouTube to retrace their footsteps. But even as they become more popular, these fragile and once-remote places should be protected from over-tourism.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250731110736_f97110b7cdc3e7f80d5877690948fc9f4c95a09c583deb23b07355491e6c5446.jpg" data-media-id="editor_8" data-image-id="20250731110736_f97110b7cdc3e7f80d5877690948fc9f4c95a09c583deb23b07355491e6c5446" data-rendition-name="original" width="1083" height="699" loading="lazy" alt="Visit Nepal in the monsoon NT"> </figure>  <h2>INCREASING FOOTFALL</h2> Chaurikharka is located in Bhume Rural Municipality of East Rukum, near the scenic valley of Dhorpatan in Baglung district. Even in the <a href="https://nepalitimes.com/banner/monsoon-culture">middle of the monsoon</a>, there is a steady stream of Nepali hikers trooping to these high pastures – especially during festival days like Saune Sankranti which this year was on 17 July and actually marks the auspicious beginning of the monsoon here. “This year the rains have not been as heavy and there have been some clear mornings when we could see everything from Dhaulagiri to Machapuchre,” says Khageswar Bhandari, who trekked up here from the road. “The flowers, the greenery and the snowy mountain views make this an incredibly unique place.”&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250802130824_1b9e26f2e9853fdfe69154bb42a7c9ea6da4bf4940efc1da99b304dcfbd7d3d9.jpg" data-media-id="editor_10" data-image-id="20250802130824_1b9e26f2e9853fdfe69154bb42a7c9ea6da4bf4940efc1da99b304dcfbd7d3d9" data-rendition-name="original" width="2048" height="1152" loading="lazy" alt="Visit Nepal in the monsoon"> </figure>  Chaurikharka is worthwhile to get to in any season, but it has a different charm during the monsoon. Word has spread and because it is now easy to get to from Baglung or even Pokhara, people have been flocking here.&nbsp; “Holidays and Saturdays see the largest crowds, with up to 500 visitors every day,” says ward chair Mankaji Pun of Bhume.&nbsp; There was a time not too long ago when local herders brought sheep, goats, cows, buffaloes, horses, and mules to graze here during the monsoon. Although there are still livestock around, animals have been replaced by visitors taking selfies. Read also: <a href="https://nepalitimes.com/here-now/the-monsoon-and-nature-s-arithmetic">The monsoon, and nature’s arithmetic</a>, Tom Robertson Ward Chair Pun says infrastructure development is his main priority. A foot trail to Chaurikharka was built last year by the Tourism Division Office in Kohalpur, but access via the Raniwas-Koipa road section still remains challenging.&nbsp; “If we get more budget, we can improve the road and facilities to make Chaurikharka the main tourist attraction of this region,” says Bhume Municipality Chair Hom Prakash Shrestha. “After that, we hope to promote Chaurikharka as a top tourist spot.”&nbsp; Economic activity is also picking up with the arrival of visitors, but there seems to be a need to manage the makeshift sheds made of corrugated sheets that spoil the beauty of the place. Tea shops and lodges are also available but facilities are basic. Kuldeep Neupane took a three-day trip from Ghorahi in Dang to visit Chaurikharka recently, and says: “This is an ideal trip to make a quick getaway and let nature recharge your mind and body. And it is much more fun with a tent, to watch the sunrise over the Himalaya or the mist blowing in.”

Visit Nepal in the monsoon

Two weeks ago, Prime Minister KP Sharma Oli announced jubilantly on social media that Nepal had achieved a historic annual growth of 81.8% in exports. He was right. Nepal’s trade did take a great leap forward compared to last year. But the dramatic rise was mainly due to processed soya bean oil.&nbsp; However, Nepal does not produce the edible oil it exports. In fact, the soya and palm oil that make up 44% of total exports are imported from Southeast Asia and South America, and simply re-exported, mostly to India.&nbsp; Under the SAFTA (South Asian Free Trade Area) Agreement, Nepal can export products to India duty-free if it has at least 30% value-added. Nepal’s traders have taken advantage of SAFTA even though the edible oils they export do not reach that value addition threshold. “The 30% value addition requirement is often only on paper,” says former commerce secretary Purushottam Ojha. “It is clear that simply packaging edible oils in Nepal does not fulfil the terms of the trade agreement.” Prime Minister Oli is aware of this, and even called Nepal’s export figures “fake” at an earlier event. The government is relying on other iffy figures to suggest that Nepal’s economy is strong and getting stronger. For example, the value of imports rose by 13.25% in 2024-25 compared to the previous fiscal year.&nbsp; Some of it was due to a jump in electric vehicle imports worth Rs 31.76 billion, but mostly it was because more wholesale soya oil was imported to be re-packaged and sold in India. The very fact that the government boasts about increased imports is an indication of how much it relies on taxing them for revenue. Touting such trade figures cannot be the basis to claim an economic rebound.&nbsp; “A jump in the value of imports can be interpreted as an increase in purchasing power, but it is not evidence of a stronger economy,” says economist Keshav Acharya. “Even though imports have increased, Nepal's domestic production and productive capacity have not improved.” Nepal Rastra Bank's semi-annual economic activity study report shows that industrial production was down in the first six months of the last fiscal year. This despite an increase in the number of new industries registered and investment commitments. Out of the Rs70.2 billion proposed foreign investment, Nepal received only Rs17.9 billion last year.&nbsp; Meanwhile, the rate of capital formation was limited to 24% last year, which is lower than the year before, suggesting that new investment, job creation and economic expansion all declined. If domestic production does not improve in relation to this year’s inflated trade figures, the outflow will put pressure on foreign exchange reserves like it did three years ago. At that time, Nepal borrowed from the IMF under its Extended Credit Facility Program to kickstart the economy.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025080710084_2cdaaa5795828c4a7de93a0604ba884ef0a8b8f24cccd939f6c24e279ab6058f.jpg" data-media-id="editor_0" data-image-id="2025080710084_2cdaaa5795828c4a7de93a0604ba884ef0a8b8f24cccd939f6c24e279ab6058f" data-rendition-name="original" width="1633" height="723" loading="lazy" alt="Nepal's bubble economy NT"> <figcaption>Source: NEPAL RASTRA BANK</figcaption> </figure>  The macroeconomy is on firm footing with foreign exchange reserves at a comfortable Rs2,520 billion in May, up 23% from last year. This was largely due to remittances, and partly due to a falling NPR exchange rate. Real estate transactions and the stock market index have also been climbing as a result of government policies to revive the sector.&nbsp; However, former executive director of Nepal Rastra Bank Nar Bahadur Thapa cautions: “This is not organic growth, it is the result of deliberate policy decisions to relax rules on real estate and stock markets transactions.” In reality, the sharp rise in land prices have increased the cost of production, and excessive monetisation of the real estate has become the main source of Nepal’s economic woes. The central bank has announced a slew of new policies, shifting the terms of loan repayment for industrialists and entrepreneurs, reducing interest rates, and injecting more working capital — all designed to inject adrenaline into the real estate and stock market sectors.&nbsp; When he was governor, Mahaprasad Adhikari made several financial reforms during the latter half of his tenure to stimulate the economy, including tightening credit flow.&nbsp; By the last fiscal year, additional financial reforms had resulted in a credit expansion rate of around 8%. As the pace of credit expansion slows, real estate prices have started to fall. This is actually beneficial to the economy, because it lays the foundation for improvements in land-related entrepreneurship, production, and the construction sector. Just because real estate and the stock market transactions increase, it does not indicate an economic turnaround — especially when manufacturing and productive sector continues to languish.&nbsp; “It is foolish to believe that real estate and the stock market have magically revived our economy. Agriculture employs more than half of the population, but it is in decline. Investment in the productive sector has not increased, and job creation has not increased.” Two years ago, Nepal’s industrialists, business leaders, and political leadership predicted a recession amidst a sluggish business, declining market demand, large-scale job loss, and a shrinking real estate and share market.&nbsp; Still, the economy grew by 3.36% in fiscal year 2023/24. In fact, Nepal’s economy has grown nominally over the last two decades even when all sectors of the economy are in decline.&nbsp; Says Keshav Acharya: “The growth in trade, real estate, and the stock market are bubbles. The real economy remains stagnant.”

Nepal’s bubble economy

Nepal is graduating to become a developing country on 24 November 2026 after half-century in the Least Developed Country (LDC) category. By 2030, the country hopes to transition to middle-income status.&nbsp; Everone from Prime Minister K P Oli have boasted that this is a matter of national pride, and will have a multiplier impact on trade and economy.&nbsp; But will it make any difference to the average Nepali? Not unless improved governance <a href="https://nepalitimes.com/news/why-invest-in-nepal">spurs investment and creates jobs</a>.&nbsp; Countries need to meet at least two of the three criteria in two consecutive triennial reviews to be eligible for graduation from LDC. Nepal has consistently met the thresholds for the Human Assets Index (HAI) and the Economic and Environmental Vulnerability Index (EVI) in 2015, 2018, and 2021. But Nepal was recommended for graduation before meeting the per capita <a href="https://nepalitimes.com/banner/nepals-great-income-divide">Gross National Income (GNI)</a> threshold of $1,306. “A major implication of LDC graduation is the loss of preferential market access available through Generalised System of Preferences (GSP) and other arrangements,” explains economist Sameer Khatiwada. “But over two-thirds of <a href="https://nepalitimes.com/news/nepal-doesnt-produce-its-2-biggest-export-items">Nepal’s exports</a> are to India, and the preferential market access to India is through a bilateral trade agreement. This has nothing to do with our LDC status.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250815060832_f5eabe7628a8cdf84f33b25d7cef3c4dc8913a26d8e5b253ea52a36e176b8a85.jpg" data-media-id="editor_3" data-image-id="20250815060832_f5eabe7628a8cdf84f33b25d7cef3c4dc8913a26d8e5b253ea52a36e176b8a85" data-rendition-name="original" width="640" height="470" loading="lazy" alt="LDC graduation "> </figure>  Furthermore, a provision under the South Asian Free Trade Area (SAFTA) allows Nepal to export to India duty-free if the items are at least 30% value-added. Nepali traders take advantage of this by re-exporting edible oils without meeting that requirement, falsely boosting Nepal’s exports.“ Following graduation from LDC, the value addition threshold might increase to 40%,” says Kalpana Khanal of the Policy Research Institute. “This is supposed to work to our advantage, because on paper value addition inherently means <a href="https://nepalitimes.com/multimedia/staying-home-to-create-jobs">job creation at home</a>.” But Nepal’s exports to other major destinations will face <a href="https://nepalitimes.com/news/nepal-and-the-us-india-tariff-tiff">tariff increases</a> with the graduation. A South Asia Watch on Trade, Economics and Environment (SWATEE) study shows that while tariff increase in the US market is relatively low (see page 5) it is considerably higher in Europe. The International Trade Centre (ITC) in a 2022 study also estimated that graduation could result in a 4.3% decline in Nepal’s projected exports, but this is excluding the impact of changes in ‘rules of origin’ provisions in preference-granting countries such as the UK and Europe.&nbsp; Nepal’s top export to these preference-granting countries is <a href="https://archive.nepalitimes.com/news.php?id=1482">carpets</a>, and will not be impacted, but other items such as textiles and apparel will be heavily affected due to higher cost of production. The impact will felt mostly by small and medium enterprises which represent the largest share of exports to LDC-specific preference-granting countries. As for the service exports, Nepal never really made use of the World Trade Organization’s LDC services waiver anyway, hence the effect will be minimal, if any. There is also concern about Nepal’s graduation at a time when the global economy is topsy-turvy, amidst <a href="https://nepalitimes.com/opinion/turning-point-in-us-india-relations">tariff wars and conflicts</a>. This affects Nepalis abroad directly and may impact <a href="https://nepalitimes.com/news/more-remittance-more-than-remittance">remittances </a>which hit $11 billion in 2024. In comparison, Nepal only received $350 million in foreign loans and grants last year.&nbsp; Tourism arrivals have finally reached pre-pandemic levels, but bad publicity about pollution, poor infrastructure and bureaucratic hurdles hinder further growth. Manufacturing continues to struggle, while hydropower and the IT sector have taken off.&nbsp; “Look at data -- <a href="https://nepalitimes.com/news/tourism-needs-a-new-push">tourism arrivals</a> are up, spending is up, IT exports are up, <a href="https://nepalitimes.com/news/why-nepal-needs-to-restore-ev-tax-subsidy">EV sales </a>are up, Europe still needs 85-90 million skilled workers. We are sitting on $16 billion in cash reserves, our balance of payment, foreign exchange reserve, tax to GDP ratio, credit flow are all positive, we have to build on these factors,” says Sujeev Shakya of the Nepal Economic Forum. He adds: “Our mindset creates negativity to promote rent-seeking behaviour, but this cynicism will go away after 2026 with LDC graduation. We must deal with data, look at trends, and projects which will bring in <a href="https://nepalitimes.com/from-the-nepali-press/why-there-is-no-foreign-investment-in-nepal">international investments</a>.” Khanal agrees that investment is not dependent on<a href="https://archive.nepalitimes.com/regular-columns/backside/Nepal-not-the-least-developed-country,306"> LDC status</a>. The factors that that affect investment are policy stability, a strong legal framework, market potential and ease of doing business. She adds, “That is where our focus needs to be, and we need to retain <a href="https://nepalitimes.com/diaspora-diaries/migrant-worker-returns-to-create-work-at-home?fbclid=IwAR09xJfsClCwn8uRVAmz28CU658vdKpuyDwB_b1sNlvKtAFFnSldnA0JS2g">Nepalis with jobs at home</a> for our sustained growth.” After 2026, financing support from donors and aid agencies could be affected and Nepal will no longer be able to access Least Developed Countries Fund (LDCF) to adapt to the impacts of climate change. But the Global Environment Fund and Green Climate Fund will still be available.“ LDC status does not determine bilateral development aid, that is usually driven by broader <a href="https://nepalitimes.com/here-now/looking-beyond-two-boulders">geopolitical considerations</a>,” says Sameer Khatiwada. “The World Bank and Asian Development Bank, which provide concessional loans to Nepal, it is determined mainly by per capita income, not LDC status.” &nbsp;However, Nepal may lose some concessional terms for loans. Nepal is currently a lower-middle-income country as per the World Bank in the bracket for GNI between $1,036 and $4,045. The country is already receiving more loans than grants and in July the World Bank increased its interest rate on loans by 100% from 0.75 to 1.5%. “All this means that the impact of LDC graduation for Nepal might not be as earth-shattering as some tend to think. Countries that have recently graduated, such as Botswana and the Maldives, have shows that graduation is just a step in a country’s development path,” says Khatiwada. Sujeev Shakya also sees the glass as half full, explaining that LDC graduation is just a stepping stone if Nepal has the right policies in place. He adds, “Nepal’s biggest advantage is our<a href="https://nepalitimes.com/opinion/investing-in-people"> working age population</a> and we have investments coming in. These aided by how adaptive we are as a society are the very foundations on which Nepal will grow.”

Not poor, but not rich

The final investigation report on the crash of a Saurya Airlines jet on 24 July 2024 at Kathmandu airport has revealed flaws in the carrier’s technical operation procedures, poor monitoring by the Civil Aviation Authority of Nepal (CAAN) and gaps in the airport’s emergency response. Eighteen people including a child were killed, and only the captain survived as the plane plunged seconds after takeoff, crashing within the airport perimeter. This was the latest in a series of aircraft accidents in previous years, and further tarnished Nepal’s already poor aviation safety record and contributed to the country being retained in the EU’s air safety list. &nbsp;&nbsp;&nbsp; The circumstances in the Saurya crash were different from the Yeti Airlines crash in Pokhara in January 2022 that killed all 72 on board, and two Tara Air crashes in February 2016 and May 2022 on approach to Jomsom that together claimed 45 lives. However, all four tragedies were a result of negligence of carriers and crew, failure to follow procedures, regulatory slackness, and overconfidence. The Saurya crash, especially, was a glaring example of how an ailing airline broke its own rules to allow passengers, including non-employees, a joy ride to Pokhara on a maintenance ferry flight. CRASH REPORT The Final Investigation Report prepared by the Aircraft Accident Investigation Commission and released on the first anniversary of the crash last week carried a long list of rules that were ignored or broken, and of regulatory failure. The first mistake was to cram spares, tools and inflammable chemicals needed for the aircraft’s C-Check in Pokhara into the cargo hold flouting its own ground handling procedures.&nbsp; There was no check-in of passengers, some of whom were not even employees – even though regulations say only flight and maintenance crew should be on board a maintenance positioning flight. Many brought their own luggage into the plane and stored it unsecured in the cabin. There was no flight attendant to give a safety briefing to passengers. The load and trim charts given to the flight crew were rough estimates, and the total takeoff weight of the plane was 18,300kg plus or minus 200 kg. That would still have been all right, but there was a glaring mistake in the speedchart Saurya pilots were using to calculate the minimum takeoff speed (known as VR), and it had been wrong ever since the 21-year-old aircraft entered service with the airline in 2017. FAULTY DATA&nbsp; The Commission probed Flight Data Recorder inputs from previous takeoffs of the Canadian-built CRJ200-LR in 2023-2024 and found that the undetected error in the speedchart had caused the plane to pitch up at an abnormal rotation rate at least 18 times on previous takeoffs.&nbsp; Any rotation rate more than 3°/sec is regarded as unusual. But on at least two occasions, this aircraft with tail number 9N-AME had rotation rates of 5.8°/sec and 5.5°/sec, the second one was when the pilot who survived was flying in March 2024.&nbsp; On this particular day, the plane’s rotation rate was 6.5°/sec, causing it to go into a deep stall soon after takeoff, the Commission report said. Essentially, the plane was not flying fast enough down the runway to take off safely.&nbsp; It is not yet clear whether excess weight, unsecured luggage, wrong centre of gravity were also factors, but relying on a faulty speedchart for the given takeoff weight, the captain flying pulled back on the yoke before the plane had reached takeoff speed and at a pitch angle that was too steep. The investigation report says the plane then went into a deep stall and started banking right with the stick shaking. At this point, the flight officer on the right hand seat is heard on the cockpit voice recorder saying: “Whoa, whoa, whoa. Sir, Sir, Sir…” It then banked left before the pilot flying turned the plane sharply to the right again in an evasive action to avoid the parking aprons of the international and domestic terminals. Had he not done so, there would have been a disaster of a much greater magnitude at Kathmandu airport that day. The plane scraped the runway with its right wingtip, collided with a container having helicopter spare parts, and plunged into a gully east of the runway, exploding in a fireball. The investigation also noted that the impact forces seemed to be survivable for some occupants. The fire trucks took unnecessarily long to reach the site even though it was inside the airport perimeter. The absence of an ICAO-standard runway strip, inadequate rescue drills, lack of training, and a blocked emergency service gate leading to the crash site were cited as other factors. &nbsp;&nbsp; <h2>Timestamp of a Disaster</h2>  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250731110724_39cdd04693994ce6e55a5b302905c0fa4884fe85bed21ff0779bb1439f3a5725.jpg" data-media-id="editor_0" data-image-id="20250731110724_39cdd04693994ce6e55a5b302905c0fa4884fe85bed21ff0779bb1439f3a5725" data-rendition-name="original" width="778" height="826" loading="lazy" alt="Flouting rules caused Saurya tragedy NT"> </figure>  11:10:34 - The Saurya Airlines CRJ200 on the takeoff roll from runway 02. It had a takeoff weight of about 18,300kg, but the pilot’s speedcard had a previously undetected mistake about the minimum takeoff speed. 11:10:55 -The plane with tail number 9N-AME goes into deep stall soon after takeoff because it does not have enough speed to lift its weight. The plane also has an abnormally steep nose-up attitude.&nbsp; 11:11:03 - Without enough speed to generate lift, the plane banks right, then left and right again in CCTV photos taken from the domestic apron (below). If it had not banked right, it could have hit the aprons and terminal buildings. Seen parked is Saurya’s other CRJ200 with tail number 9N-ANM.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250731110732_608132f7225c649125cca2691dd6a6bf930984c5b359e888d7ad9e5eacce3afd.jpg" data-media-id="editor_1" data-image-id="20250731110732_608132f7225c649125cca2691dd6a6bf930984c5b359e888d7ad9e5eacce3afd" data-rendition-name="original" width="770" height="555" loading="lazy" alt="Flouting rules caused Saurya tragedy NT"> </figure>  11:11:08 - The plane scrapes the runway with its right wingtip, and falls into the gully. The captain is thrown off the left side of the cockpit and survives. 11:11:15: Plane explodes in a fireball inside the airport perimeter. Firefighters take time to reach the site because of lack of access road and a blocked gate. Read the full investigation report <a href="https://www.tourism.gov.np/files/9N-AME%20AIC%20Final%20Report.pdf">here</a>.