Nepal has released the full text of the much-awaited Belt and Road Initiative (BRI) framework. The Ministry of Foreign Affairs decided to make the document public following increasing commentary and discussions about the BRI in the public domain.

Recently, Nepal and China have formally endorsed a Framework for Belt and Road Cooperation aimed at strengthening bilateral ties, fostering economic collaboration, and advancing development projects under the Belt and Road Initiative (BRI). Signed on December 4, 2024, in Beijing, the agreement builds upon a Memorandum of Understanding (MoU) signed in 2017 and marks a significant step in the countries’ strategic partnership.

Background of Cooperation

Diplomatic ties between Nepal and China date back to 1955, with both nations enjoying a history of friendship and mutual cooperation. Key milestones in their relationship include state visits by former President Bidya Devi Bhandari and Chinese President Xi Jinping in 2019, elevating their ties to a Strategic Partnership of Cooperation.

The 2017 MoU under the Belt and Road Initiative laid the groundwork for collaboration, and this framework agreement seeks to provide structured guidance for implementing priority projects in trade, connectivity, infrastructure, and financial sectors.

Key Principles of the Framework

The cooperation is guided by principles of joint consultation, pragmatic collaboration, and improved policy environments to encourage investment. Both countries have pledged to prioritize green and sustainable development, mutual respect for sovereignty, and initiatives designed to improve livelihoods.

Under this agreement, enterprises from both nations will adhere to market regulations, international standards, and respective domestic laws while promoting innovation and value-driven cooperation.

Objectives of the Framework

The cooperation framework is designed to:

1. Deepen economic partnerships by accelerating priority projects.

2. Facilitate structured negotiations for project implementation.

3. Identify new projects in line with the MoU’s objectives.

4. Expedite development through focused discussions on financing and resource allocation.

Prioritized Areas of Cooperation

Nepal and China aim to expand their collaboration across several sectors:

1. Economic Development: China will provide technical and financial assistance to enhance Nepal’s infrastructure and development. The agreement emphasizes value-for-money initiatives and partnerships with international financial institutions.

2. Financial Sector: The framework supports bilateral financial cooperation, including the establishment of Chinese bank branches in Nepal and promoting the use of national currencies in trade. It also includes measures to combat money laundering and enhance financial regulatory frameworks.

3. Transport and Connectivity: Plans include developing the Trans-Himalayan Multidimensional Connectivity Network, cross-border roadways, dry ports, and the much-anticipated China-Nepal Cross-Border Railway Project. Aviation connectivity and e-commerce development are also priorities.

4. Trade and Investment: Efforts to boost bilateral trade include improving border trade facilities, encouraging industrial collaboration, and enhancing energy cooperation through clean energy projects.

5. Customs and Border Cooperation: Both sides agreed to streamline customs processes, facilitate agricultural trade, and strengthen health and safety regulations at border points.

Identified Projects for Implementation

Several high-priority projects have been earmarked for joint implementation, including:

– Tokha-Chhahare Tunnel and Highway: A critical trade route connecting Kathmandu with Nuwakot and Rasuwagadhi.

– Hilsa-Simikot Road Project: Part of the Karnali Economic Corridor, improving connectivity in rural Nepal.

– China-Nepal Cross-Border Railway: A railway link between Tibet and Kathmandu to boost trade and people-to-people exchanges.

– Jilong-Rasuwagadhi-Chilime Power Transmission Line: Enhancing cross-border energy trade.

Additionally, projects like the Madan Bhandari University of Science and Technology and the Kathmandu Scientific Center and Science Museum reflect a commitment to education and innovation.

Cooperation Mechanisms and Terms

The framework will remain effective for an initial period of three years, with provisions for automatic extensions. Regular reviews will ensure progress and allow adjustments to priorities. Importantly, the agreement respects national laws and international obligations while allowing both countries to pursue independent partnerships with other nations.

Significance of the Agreement

This framework reinforces Nepal’s strategic importance in China’s Belt and Road Initiative and highlights China’s commitment to supporting Nepal’s development needs. For Nepal, the agreement represents an opportunity to enhance infrastructure, boost trade, and attract foreign investment, contributing to long-term economic prosperity.

Signed in Chinese, English, and Nepali, the framework reflects a shared vision for sustainable development and deeper economic integration between the two nations.