Nepal has raised strong objections to the reopening of trade between India and China through the Lipulekh Pass, asserting that the territory belongs to Nepal under the 1816 Treaty of Sugauli. The matter was discussed during a bilateral meeting between Prime Minister KP Sharma Oli and Chinese President Xi Jinping at the Tianjin State Guest House on the sidelines of the Shanghai Cooperation Organization (SCO) Summit 2025.

Foreign Secretary Amrit Bahadur Rai stated that PM Oli firmly opposed the India-China agreement to allow trade through Lipulekh, stressing that all land east of the Mahakali River is an inseparable part of Nepal’s sovereignty. PM Oli reiterated Nepal’s commitment not to allow its land to be used against any country but expressed strong disapproval of other nations deciding on Nepal’s territory.

In response, President Xi did not dispute Nepal’s position and suggested that the issue should be resolved through dialogue between Nepal and India. Both leaders also reviewed the progress of Belt and Road Initiative (BRI) projects and agreed to enhance cooperation in trade, agriculture, and connectivity. China expressed its support for turning landlocked Nepal into a land-linked country by opening additional trade routes.

Nepal had earlier lodged a formal protest following the India-China decision to reopen trade through Lipulekh in August, reviving a long-standing territorial dispute involving Lipulekh, Kalapani, and Limpiyadhura. Kathmandu maintains that these areas fall under its sovereignty, as shown in its official map amended in 2020. However, India rejects Nepal’s claim, citing historical administration, security concerns since the 1962 India-China war, and the significance of the route for the Kailash Mansarovar pilgrimage and border trade.

India argues that border trade through Lipulekh has been ongoing since 1954 and dismisses Nepal’s objections as unfounded. The disagreement continues to strain relations, with Nepal insisting that both India and China respect its sovereignty over the disputed region.