Nepal Challenges China-India Trade Through Lipulekh During PM Oli's Talks with President Xi Jinping

In a significant development during the Shanghai Cooperation Organization (SCO) Summit 2025, Prime Minister (PM) KP Sharma Oli of Nepal met with Chinese President Xi Jinping in Tianjin, China. The discussion focused on strengthening cooperation and friendly ties between the two nations.

PM Oli reiterated Nepal's sovereignty over lands east of the Mahakali River, as per the Sugauli Treaty of 1816. This claim includes the territories of Lipulekh, Kalapani, and Limpiyadhura, as stated in Nepal's official map, enshrined in its Constitution.

However, the discussion of territorial disputes was not limited to Nepal. India maintains that the territories have been under its administration since Independence, citing the presence of Indian troops in Kalapani following the 1962 war with China as evidence of its security needs. India also argues that the Lipulekh route is vital for the Kailash Mansarovar pilgrimage and for border trade with Tibet.

India disputes Nepal's claim, asserting that the Kali River begins near Kalapani, placing the territory under Indian control. However, Nepal's Foreign Secretary Amrit Bahadur Rai has emphasised that the Lipulekh Pass is an inseparable part of sovereign Nepal, and PM Oli firmly opposed any deal that might contradict this.

The issue of the Lipulekh Pass has been a contentious one, with protests in Nepal against the Indo-Chinese border trade route over the pass. The protest was first formally registered in May 2020, and Nepal has since lodged formal protests against the reopening of border trade via the Lipulekh Pass by India and China.

In response to Nepal's stance, President Xi expressed no disagreement and suggested that the issue should be resolved through dialogue between Nepal and India. China has also expressed willingness to support Nepal in enhancing the quality and commercial agricultural production to boost exports.

This was PM Oli's fourth official trip to China as Prime Minister and his second visit in 2025. In 2020, Nepal amended its Constitution to formalise its territorial claim over the three areas. Nepal has called on New Delhi to halt road construction, expansion, and trade activities in the region and has notified China that the area belongs to Nepal.

PM Oli also expressed Nepal's objection to the consensus by other countries about its land regarding the Lipulekh Pass. Despite the ongoing disputes, the meeting between PM Oli and President Xi marks a significant step towards strengthening bilateral relations between Nepal and China.

Nepal Challenges China-India Trade Through Lipulekh During PM Oli's Talks with President Xi Jinping