Nepal today inked a major deal with China to join Chinese President Xi Jinping's ambitious 'One Belt One Road' initiative to link Asia with Europe, a move that could raise concerns in India.
The decision to sign the agreement comes ahead the One Belt One Road (OBOR) forum in Beijing on May 14 and 15.
Chinese Ambassador to Nepal Yu Hong and Nepal's Foreign Secretary Shankar Bairagi signed an MoU at the Ministry of Foreign Affairs in Kathmandu.
Deputy Prime Minister and Minister of Finance Krishna Bahadur Mahara and Minister for Foreign Affairs Prakash Sharan Mahat were present during the signing ceremony.
"This agreement will bring Nepal and China closer through road connectivity and bring home the Chinese investment," Mahat said.
The agreement was important for Nepal in terms of expansion of road connectivity and construction of railways, he said.
Mahat expressed hope that the deal would help in attaining economic prosperity for the country.
"With the signing of the MoU, a new chapter has begun in the area of foreign investment and trade promotion," he said, adding Nepal would reap benefits from the Chinese project which would expand to Europe and Africa.
"Nepal needs the maximum investment and we want Chinese investment channelled in Nepal through this new project."
"Nepal would benefit from this important project initiated by China and that this should be taken as a significant achievement of Nepal's development endeavour," Bairagi said.
Yu expressed hope that the project would contribute to enhancement of China-Nepal cooperation as well as to the economic development of the South Asia region itself.
"The MoU aims to forge cooperation on promoting connectivity of facilities, trade connectivity and financial integration,” according to the Foreign Ministry statement.
The OBOR aims to enhance connectivity and cooperation among countries, primarily between China and the rest of Asia and Europe through land as well as maritime routes.
China had sent a draft proposal on OBOR to Nepal late last year. After a month-long consultation, the Nepalese side had sent back the draft to Beijing with some changes.
Nepal signing the deal with China may cause concerns in India, which has opposed Beijing's initiative. India has reservations over the China-Pakistan Economic Corridor, part of the OBOR, as it is proposed to pass through the Pakistan- occupied Kashmir.
India, which has traditionally enjoyed great economic and political ties with Nepal, has faced increasing competition from China in recent years.
Landlocked Nepal relies heavily on imports from India and completely on Indian ports for sea access.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
