- A July 2025 flood damaged a Nepal-China friendship bridge and dry port under construction
- Nepal-China trade relies on few fragile mountain passes vulnerable to landslides and earthquakes
- Kerung-Kathmandu railway faces high costs and engineering challenges in earthquake-prone Himalayas
In July 2025 a wall of water surged down the Lhende - a stream on the Nepal-China border – knocked a bridge dedicated to the 'friendship' between the two countries off its foundation.
The water also did considerable damage to an under-construction dry port.
On the Chinese side about 500 containers with goods for Nepal's festival season were left stranded at Kerung. Traders tried the Tatopani mountain pass but were stymied by landslides.
This is the story of Nepal's northern frontier, and it underlines a fact no amount of Belt and Road rhetoric can deny. It is geography that limits China's reach. Beijing could sign memorandums, construct airports, and win over Nepalese politicians… but it can't move the Himalayas.
Narrow corridor of vulnerable passes
Nepal-China commerce is squeezed through a handful of mountain passes.
Previously Tatopani was the main route but it was shut for four straight years after the 2015 earthquake. And now it is subject to seasonal landslides on the Araniko Highway. A decade ago experts pointed out the single highway - which connects to Lhasa - is narrow and fragile.
Ten years since then, and with sizeable investments, nothing seems to have changed.
Railway fighting gravity
China's flagship project is the Kerung-Kathmandu railway line.
It tells its own tale from the figures. The Nepali segment alone requires 98.5 per cent of tunnels and bridges to be built through an earthquake-prone zone, with ramping needed just to overcome the difference between the northern and southern toes of the Himalayas.
The estimated cost - $2.75 billion with corridor projects' approximation even higher.
Years of surveys and only a 'pre-feasibility study' to show for it; the final feasibility study will only be completed by the end of June 2026. And even then it is the study and not the track. India, meanwhile, completed a project report for the Raxaul-Kathmandu line in the southern plain.
Price of northern route
For Nepalese importers, costs can be cruel.
Logistics consume 20 per cent of production costs. In India the figure is 16 per cent. For China it is just nine per cent. The northern routes add to this cost: narrow roads, fragile customs throughput, weeks lost to the weather. In fact, even China-made goods reach Nepal via sea (berthing at Kolkata or Visakhapatnam). It is cheaper, faster and, most important, predictable.
The difference is underlined by one data point: despite an early 2016 transit agreement giving Nepal access to Chinese seaports, no third-country cargo reached Kathmandu from China's ports in the first seven years after it was signed.
The first such cargo - Vietnamese turmeric - only arrived via Chinese ports in September 2023, while regular third-country shipments via Chinese ports have yet to come.
Geographical limits to ambitions
The limits are visible in trade statistics.
In the first ten months of FY25/26, India delivered 58 per cent of Nepal's imports, China delivered 17-20 per cent, and the ratio is asymmetric in a way roads cannot fix.
Beijing exports about $1.7 billion worth of goods to Nepal annually and imports only $27 million. China sells. It does not buy. The partner draining hard currency from Nepal and using the fragile passes is no substitute to a neighbor with a 1,750 km-long plains border.
Kathmandu's experiment
After 2015 Kathmandu switched to the northern direction, signing transit deals and embracing the Belt Road Initiative, or BRI, to escape from dependence on New Delhi.
However, the mountain range has not done what Nepal expected from it. Now, ten years later, when floods and landslides hit, Nepal's supply line goes south again - to Birgunj, Kolkata, and Visakhapatnam, because these routes are functional in rainy season.
All this is not to say India is the perfect partner. But geographical reality is not an issue of sentiments. China has plenty of promises and surveys, but all-year, all-weather throughput is not there. India provides Nepal contiguity, lowland railroad, and dozens of crossings. China provides only one seismic frontier studded with bridges washed away by the monsoon. China's ambitions and chequebook in Nepal are real, but the limit of its ambitions is at the snowline.
The Himalayas are not a frontier to be financed open; they are a wall. And as long as it stays standing, India will remain Nepal's indispensable economic partner not because of charm and generosity, but because of the simple fact of geography.
