China has announced that it will grant duty-free access to all goods imported from least developed countries (LDCs) with which it has diplomatic relations. The United Nations lists 45 countries, including Nepal, as least developed countries. Although Nepal is currently classified as an LDC, it is set to transition to developing country status after 2026.

China declared that this benefit will apply to all LDCs, including 33 African nations, during the recent China-Africa Summit. China claims to be the first major developing country to make such a decision. Previously, in 2022, China had announced zero customs duty on 98 percent of goods from 16 underdeveloped countries, including Nepal. Under this policy, more than 8,000 items exported from Nepal to China are exempt from customs duties.

However, government officials and exporters from Nepal have pointed out that non-tariff barriers remain a significant challenge for exports to China.

According to data from the Trade and Export Promotion Center, Nepal exported goods worth Rs 2.59 billion to China in the last fiscal year, 2023/24. Imports from China, however, totaled over Rs 298 billion.