1. Dr. Nishchal N. Pandey Director, Centre for South Asian Studies Kathmandu, NEPAL www.csas.org.np

2. Historical Significance Nepal has historically been used for trading between India and China Dependence on the Kolkata port has hindered smooth supply of import & export, transit cost has affected export competitiveness Kodari highway built in the 60s is the only paved road link with TAR 15 entry points with India

4. Kodari Highway Easiest Connection between North India and TAR Constructed in 1962 Functional 12 months a year, black-topped- links Khasa (Zhangmu) town of TAR with Kathmandu Now connected with Dhulikhel-Sindhilu road constructed by Japanese assistance linking the terai region

5. Future Road Projects with TAR- China Completion of Syafrubesi-Rasuagadhi road (18 km) Construction of Trishuli- Galchi with 3 bridges (17 km) Construction of Beni- Jomsom road (72 km) Construction of ICD at Kodari for transit facilitation

6. Developing Nepal as a Transit State After Golmud-Lhasa-Shigatse railway is extended to Nepal border, a new vista of opportunity opens for 3 countries. GoI is also constructing railway and better roads in the Indo-Nepal border Goods from North India can reach Khasa within 24 hrs. and vice versa. Optical fibre is already laid from TAR to Dhulikhel

7. Problems at Tatopani Border Point Rs. 1.45 bln. Collected during 4 months of the current fiscal year Delays, red-tapism, landslide, stronger Yuan contributes to a drop of revenue Transporters charge Rs. 95,000 (Tatopani-Ktm) but only 25,000 for (Birgunj- Ktm.)

8. Possible Routes of Additional North-South Roads Mohana-Dhangadi-Atari-Darchula-Tinker (415 km) Nepalgunj-Surkhet-Jumla-Hilsa-Yari-Purang (581 km) Bhairahawa-Pokhara-Jomsom-Lizhi (467 km) Birgunj-Galchi-Rasua-Syafrubesi (340 km) Janakpur-Dolakha-Lamabagar-TAR (295 km) Rani-Itahari-Hile-Kimathanka-TAR (419 km) Kechana-Taplejung-Olangchungola (460 km)

9. Border Trade with India Open border, Nepal’s largest trading partner ICD Birgunj has been functional and freight is coming straight from Kolkata to Birgunj Oil and gas still major issues as supply is not regular Chinese goods found in U.P & Bihar are mostly through Nepal

10. Recommendations Lhasa-Golmud railway touching Nepal could help North India and even Bangladesh Infrastructure development in Indo-Nepal and Nepal-China borders given priority by Nepal govt. Bangladesh PM has assured Nepal & Bhutan to use the Mongla port India and China both need to cooperate within Nepal rather than compete with one another.

11.  Sub-regional Connectivity means to enhance intra-regional trade and to achieve comprehensive growth as integrated transport and communication systems  It improves access to sub-regional markets through diversifying the basket of goods available for export, attracting more foreign direct investment, and integrating production networks  It is essential for economic development, closing development gaps, ensuring economic and social integration and strengthening the countries’ competitiveness 11 Sub-regional Connectivity in South Asia for Trade

12. Routes Connecting Bangladesh, Nepal and Bhutan 12

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14. Roads in the Terai Indo-Nepal Border

15. Borders need to be re-designed as Bazaars not as Barriers!!!