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Home UPDATE
India-China border trade agreement triggers an India-Nepal diplomatic row

The new pointed map of Nepal, with the disputed area circled out at the top left

India-China border trade agreement triggers an India-Nepal diplomatic row

NC Editorby NC Editor
August 21, 2025
in UPDATE
0

Just after receiving an invitation for a state visit to India, Nepal Prime Minister KP Sharma Oli is facing an ‘unwelcoming’ situation.  During Chinese Foreign Minister Wang Yi’s visit to India on August 18 and 19, the two parties agreed to reopen the Lipulekh Pass for trade purposes. 

At a time when India and China are attempting to find a common ground following the Trump tariffs, Nepal’s discomfort with Indian unilateralism has resurfaced. Nepal has claimed Lipulekh, Kalapani, and Limpiyadhura as its parts while India maintains control over the territory.

Following the agreement between the two most populous countries in the world, Nepal’s Ministry of Foreign Affairs published a statement on Wednesday evening reiterating that Limpiyadhura, Lipulekh, and Kalapani are integral parts of Nepal. Nepal urged India not to “carry out activities such as road construction or expansion and cross-border trade” in the disputed land.

The Indian side was quick to respond to Nepal. Spokesperson of India’s Ministry of External Affairs, Randhir Jaiswal, issued a statement the same day. “Our position remains that such claims are neither justified nor based on historical facts and evidence. Any unilateral, artificial enlargement of territorial claims is untenable,” the statement reads.

India has maintained that India and China have been engaged in trade through the pass since 1954. Jaiswal, however, said that India remains open to constructive interaction on resolving the boundary issues.

PM Oli will be attending the Shanghai Cooperation Organisation (SCO) summit in Tianjin, China, between August 31 and September 1, before his state visit to India in late September.

The backdrop of the dispute

The 1816 Treaty of Sugauli, between Nepal and the British Raj, designated the Kali (Mahakali) River as the western border of Nepal. However, the treaty did not explicitly identify the source of the river, planting the seeds of disputes today. 

As a part of the 1950 Indo-Nepal Friendship Treaty, India established 17 military checkposts across the Himalayas in Nepal to monitor Tibet-China. India set up a military check post in the Kalapani of the Lipulekh region in 1962 during the Sino-Indian war. On King Mahendra’s request to remove the checkposts, India withdrew from 17 posts. However, India never withdrew from the Kalapani checkpost, claiming it to be a part of its Uttarakhand state.

Nepal expressed its concerns when India and China agreed on using the same pass for trade purposes in 2015. In November 2019, India published a new political map with this territory within its boundary, in response to which Nepal sent a diplomatic note. Nepal objected to the inauguration of a road by India in the disputed territory in 2020.  In May 2020, under KP Sharma Oli as the Prime Minister, Nepal amended its constitution to include the territory in its new political map, popularly known as the ‘pointed map.’

PM Oli has maintained a ‘nationalist’ image in the latter half of his political career. In addition to the introduction of the ‘pointed map,’ he attempted to foster trade relations with China during the 2015 Indian blockade, following the promulgation of the Constitution of Nepal. Both these issues have historically given PM Oli chances to build support for his government. PM Oli has also reiterated that Lord Ram was born in Madi of Nepal’s Chitwan District, not in Ayodhya of India, upsetting the Hindutva leaders of India.

Observers long pointed out India not inviting PM Oli for an official visit even after more than a year of assuming office as a symbolic ‘disapproval.’

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