KATHMANDU, SEPTEMBER 5
The unilateral closure of the Tatopani border by China comes at a particularly damaging moment for Nepal's traders. With Dashain and Tihar approaching, the two biggest consumption festivals of the year, thousands of tonnes of Chinese goods normally destined for Nepal's festive market are now facing delays, raising the prospect of shortages, higher prices and a subdued shopping season.
China has indefinitely suspended cargo movement through Zhangmu, the Chinese side of the Tatopani crossing, citing the risk of further flooding and landslides following last week's devastating floods in the Bhotekoshi–Trishuli corridor. The decision came just days after the crossing had resumed limited operations following weeks of disruption caused by landslides along the Araniko Highway.
The timing could hardly be worse for Nepali importers. Tatopani has become an increasingly important gateway for Chinese goods. Imports through the customs point reached Rs 50.4 billion in fiscal 2024/25, up sharply from Rs40.34 billion a year earlier and Rs 13.21 billion in 2022/23. That means goods worth an average of roughly Rs 4.2 billion a month entered Nepal through Tatopani last fiscal year.
A significant portion of those imports consists of products that feed directly into the festive-season market-ready-made garments, footwear, consumer goods, electronics, fruits and other merchandise. In 2024/25 alone, ready-made garments worth Rs 7.65 billion entered through Tatopani, while electric machinery and equipment accounted for Rs 3.48 billion. Fruit imports were worth Rs3.59 billion, and footwear another Rs 1.54 billion.
The vehicle trade is even bigger. Vehicles and vehicle parts worth Rs 14.28 billion entered through Tatopani in 2024/25, generating Rs 7.57 billion in customs revenue. Chinese electric vehicles have become particularly important, with 2,724 EVs worth Rs 7.05 billion imported through the checkpoint by mid-April last year, yielding Rs 3.75 billion in government revenue.
For traders, however, it is the consumer goods sitting in or waiting to enter China that pose the immediate concern. The border closure has left importers scrambling for alternatives just as they would normally be accelerating shipments for Dashain and Tihar. Traders can theoretically divert cargo through the Korala crossing in Mustang or take the much longer sea route via Kolkata, but neither offers an easy substitute for Tatopani.
The problem is compounded by the fact that Rasuwagadhi, Nepal's other major northern trade route, was devastated by the same flood disaster. With Tatopani now closed and Rasuwagadhi out of operation, Korala has effectively become the only functioning overland route for substantial Nepal-China trade.
According to Birendra Raj Pandey, president of the Confederation of the Nepalese Industries (CNI), the northern border is extremely important for trade and goods. They are supposed to arrive seamlessly. The festive season is precisely the period when market demand peaks, making this timing very sensitive.
"Since one major transit point, Rasuwagadhi, has suffered severe damage, additional pressure is naturally mounting on the remaining border crossings," he told THT.
The consequences could soon reach consumers. Delayed shipments mean traders have less time to replenish stocks before the festive rush. Transporting goods through longer alternative routes will increase freight and handling costs, while limited availability could allow retailers to raise prices.
The closure therefore threatens to turn what should be Nepal's busiest retail period into a logistical scramble. And the numbers underline the scale of the problem: Tatopani is no longer a marginal border crossing. It is a Rs 50-billion-a-year import gateway, carrying precisely the kinds of goods Nepalis buy heavily during Dashain and Tihar.
The Dashain and Tihar festive seasons account for 40% to 70% of Nepal's annual retail sales, driven by an influx of festive remittances. Following last year's Rasuwagadhi closures, alternative transit costs pushed clothing and footwear prices up by 15% to 30%, freight rates up by 20% to 40%, and essential foods up by 10% to 50%.
With the border's reopening date still uncertain, the festive shopping season is now effectively racing against the flood recovery.
Pandey further said that if this gets resolved quickly, we won't face massive supply disruptions. Otherwise, costs will escalate, and shortages and high demand will naturally lead to inflation.
"Its overall impact will definitely lead to inflation," he said, adding, "Both governments need to handle this with sensitivity and work bilaterally to resolve it. From the business community's end, we will lobby where necessary. We remain hopeful that bilateral talks will yield a quick resolution-especially given that we just faced such a major disaster, with key transit lines completely disrupted."
Experts in the sector have also noted that the decision to close the northern border will have an extremely negative impact on a landlocked country like Nepal. "We only had two main connectivity points with China-one was Kerung and the other was Tatopani. Now, due to uncertainty in Kerung as well, we are facing continuous losses," said Bhim Ghimire, vice president of CNI's Koshi Province chapter.
"This unilateral decision by China to close the border is wrong. I feel they must rethink this for Nepal's sake. We are a neighbouring landlocked country, and according to international transit and trade practices, they should provide us easy access."
He suggested that the government must initiate diplomatic efforts to ease the situation. Since this involves diplomacy, bilateral relations between two countries, and transit issues, the government must take a positive approach and do proper follow-ups.
"This closure by China is causing us massive losses. Products imported from China via Tatopani had lower transportation costs, were cost-effective, and reduced logistics expenses, bringing reasonable pricing for consumers," Ghimire added. "Now, having to re-route imports through Kolkata port means longer routes, more time, and significantly higher transportation costs. Whether it is raw materials or trading goods, re-routing via Kolkata negatively affects cost-effectiveness."
Experts emphasise that Nepal and China share a long-standing friendship as neighbouring countries. A unilateral blockage against a neighbour is unfair to Nepal. The Nepalese government needs to address this seriously through diplomatic channels-whether through the Foreign Affairs Minister, Industry and Commerce Minister, or at the Prime Minister level-to approach the issue effectively for Nepal's benefit.
"Beyond Tatopani, we must also seek alternative entry points, such as Kimathanka. We have been advocating for Kimathanka for 25 years-to open the border point so that it can serve as a transit hub for India, Bangladesh, and Koshi Province (Biratnagar)," Ghimire said, adding, "However, that approach hasn't reached fruition either, and even basic track infrastructure or customs management isn't ready there."