Nepal pushes to end dependency on India with China rail, tunnel deals

Nepal's President Bidhya Devi Bhandari and China's President Xi Jinping inspect an honor guard during a welcome ceremony at the Tribhuvan International Airport in Kathmandu

By Gopal Sharma

KATHMANDU (Reuters) - Chinese President Xi Jinping wound up two days of meetings in Nepal on Sunday with separate deals for a rail link to Tibet and a tunnel, an official said, as the Himalayan nation seeks to end an Indian dominance over its trade routes by increasing connectivity with Beijing.

The 70-km (42-mile) rail link will connect Gyiron in Tibet with Nepal's capital city of Kathmandu, making it one of the most ambitious infrastructure projects in the country.

A Chinese team has already conducted a preliminary study for the project, which will be part of China’s Belt and Road Initiative, Xi's signature diplomatic and trade push that is attempting to recreate the old Silk Road joining China with Asia and Europe.

Alongside, a proposed 28-km (17 mile) road tunnel will more than halve the distance from Kathmandu to the Chinese border, saving on time and cost.

"China will now conduct a feasibility study of the rail project and help construct the tunnel way," Rajeshor Gyawali, a spokesman for Nepal's Ministry of Physical Infrastructure and Transport, told Reuters.

Nepal has sought to increase connectivity with China since a blockade along its border with India resulted in several months of acute shortage of fuel and medicine in 2015 and 2016.

"These facilities will give us alternative trade routes when we face border blockades," Gyawali said.

China and India jostle for influence over Nepal, the natural buffer between them, and are investing in infrastructure. India accounts for nearly two thirds of Nepal's trade and is the sole supplier of fuel.

Officials from both sides also signed 20 deals covering trade, water supply and traditional medicines at the end of Xi's visit, the first by a Chinese president in 22 years.

"We will help Nepal realize its dream of becoming a land-linked country from a land-locked one," Xi said at a dinner on Saturday after he arrived from India where he had informal meetings with Prime Minister Narendra Modi.

(Reporting by Gopal Sharma; Editing by Frances kerry)