Tariff and Territory Saga: Oli Sleepless as Trump Dreams of a Nobel Prize

India and China, those two massive players, just decided to reopen three mountain trade routes after five long years of closure. We're talking Shipki La, Nathu La, and the real troublemaker of the group: Lipulekh.

Now, on the surface this might sound like a small bureaucratic update. Traders in Tibet get to move goods again, Indian border towns get some business, and officials issue joint press releases. All good, right?

Well, not really, because for Nepal, this “reopening” hits like a political earthquake. Why? Because Lipulekh Pass, the very spot India and China are suddenly all chummy over, is territory Nepal has been absolutely adamant belongs to them. Seriously, we didn’t just make a casual claim. Back in 2020, Nepal went all-in, as the parliament wrote Lipulekh, Kalapani, and Limpiyadhura directly into the Constitution. They even slapped it on their national emblem. It was supposed to be the definitive, no-questions-asked, final word.

So, for the million-dollar question: why is India, with a straight face, doing a trade deal with China that involves a pass Nepal considers its undisputed sovereign land? 

And, because geopolitics loves a good twist, how is Trump responsible for all of this?

Trump Pulls the Trigger

In August 2025, Donald Trump  decided India was the "weak link" in his anti-Russia strategy. His logic was simple: India bought 88 million tonnes of Russian crude in 2024, making them Russia’s second-biggest oil client. Every barrel, in his mind, fueled the Ukraine war. 

So, what does he do? He slaps an extra 25% tariff on Indian imports, pushing total tariffs to 50%. India exports $87 billion to the U.S., their single largest market. Suddenly, over half that trade is in jeopardy. Not exactly small potatoes.

Now here’s where geopolitics gets messy. If Trump really wanted to go after Russia’s oil partners, he could’ve hit China harder. After all, China imported 109 million tonnes of Russian crude in 2024, more than India. But Trump spared Beijing. He went after India instead.

Why? Because in Trump’s transactional worldview, China was too big to be cornered. India, on the other hand, could be squeezed without risking a full-blown collapse of U.S. supply chains.

For India, the U.S. is the number one export destination. For the U.S., India is replaceable; for India, the U.S. is indispensable. Trump understood this imbalance, and exploited it.

As you can imagine, this left India in a real bind. Overnight, its biggest export market had turned hostile, and there weren’t too many backup doors to knock on. So what do you do when you’re cornered like that? You start looking for new friends, even the ones that were rivals till yesterday. That’s when the “enemy of my enemy is my friend” logic kicked in. And suddenly, after five years of closed Himalayan trade routes, India and China decided to cozy up.

Which, inevitably, brings us back to Lipulekh.

Nepal: Watching From the Sidelines

For Nepal, the reopening of Lipulekh is more of a sovereignty crisis than a trade story.

Let’s rewind a bit. In May 2020, India’s Defense Minister Rajnath Singh inaugurated a new 80-km road to Lipulekh, meant to shorten the pilgrimage route to Mount Kailash. Nepal saw this as construction on its land, and the backlash was huge. Within weeks, Nepal’s Parliament did something unprecedented: it amended the Constitution to officially add Lipulekh, Kalapani, and Limpiyadhura to its political map.

For the first time, Nepal legally bound itself to these claims and stood up against India. 

The government even has plans to add the “Chucche Naksha” into currency notes. The irony here is, the contract for printing Nepali currency has been awarded to China. And now that China has signed off on using Lipulekh for trade with India, what happens when we send our new map design to Beijing for printing? Will China politely refuse?

This is the kind of geopolitical absurdity small states live with.

The “Goldstar” Lesson: India vs China, Until It Isn’t

What makes this turn of events even more striking is how anti-China India was just a few months ago.

Take the Goldstar saga. Goldstar is one of Nepal’s largest shoe brands, exporting heavily to India. In 2024, Indian customs started blocking Goldstar shipments at the border, demanding BIS (Bureau of Indian Standards) certification to “verify” whether the shoes contained Chinese components. For months, Nepali exporters were left stranded, unable to sell.

The message was clear: India didn’t want Chinese supply chains sneaking in through Nepal. Trade with China was the enemy.

Fast-forward to August 2025, and the same India is shaking hands with China to reopen Lipulekh. 

And that’s geopolitics for you; plot twists faster than Netflix series.

Lipulekh: A Pass With More Than Pilgrims

Why does Lipulekh matter so much?

• For India, it’s about logistics and legitimacy. The pass is a shortcut for the Kailash Mansarovar pilgrimage, a key religious route. It’s also a potential military lifeline, sitting at the tri-junction of India, Nepal, and China.
  

• For China, it’s about optics. Reopening Lipulekh shows it can engage India on trade even while staring down Indian troops across the Line of Actual Control. It’s leverage, pure and simple.
  

• For Nepal, it’s existential. Holding Lipulekh would mean controlling a trade gateway between two of the world’s largest economies. It would mean sovereignty respected rather than ignored. Instead, Nepal gets sidelined, again.

A Pattern of Exclusion

If you think this is new, it’s not. Nepal has been left out of decisions over Lipulekh for decades.

• 1954: India and China signed the Panchsheel Agreement, listing Lipulekh as a trade pass, without consulting Nepal.
  

• 1962: During the India-China war, Indian troops moved into Kalapani citing the move as “temporary” and never left, despite Nepal’s continued protests.
  

• 2015: Modi and Xi’s joint statement once again included Lipulekh in their trade talks. Nepal objected, but it changed nothing.
  

• 2020: India’s road inauguration triggered Nepal’s constitutional map change,  its boldest move yet.
  

• 2025: And now, despite all that, Lipulekh is back on the India-China trade list, while Nepal watches from the sidelines.

History repeats itself, each time with Nepal excluded from the room.

The Buffer State Curse

This is the curse of being a buffer state.

Nepal sits between two rising giants. India sees any Chinese footprint in Nepal as a threat. China sees Nepal as part of its Belt and Road ambitions. Both treat Nepal like a chessboard square rather than a sovereign equal.

Every time India and China make a move, Nepal gets trapped in the crossfire. Protests, maps, and diplomatic notes may assert sovereignty, but they don’t shift ground realities. Troops remain, roads get built, and trade routes reopen.

It’s not that Nepal lacks evidence. Colonial-era maps from the early 1800s placed Limpiyadhura and Lipulekh firmly within Nepal. Census records and land revenue collection continued until the early 1960s. But as the old saying goes: in geopolitics, maps matter less than boots on the ground. And India has had boots in Kalapani since 1962.

Oli’s Headache Before His Visit to India

Now, Prime Minister KP Sharma Oli is heading into one of the toughest moments of his career. 

At the end of August, he’ll be in China for the SCO summit; two weeks later, in New Delhi. And in both places, one word will dominate: Lipulekh.

For Oli, this hits especially hard, because his entire political brand is built on nationalism. On the idea that he’s the one leader who won’t let India push Nepal around. In 2020, it was his government that redrew Nepal’s map to include Lipulekh and Limpiyadhura, a move that made him a hero at home. People saw it as proof that he had the guts to stand up to India when others never dared to.

 Now that India and China have reopened trade through Lipulekh without Nepal’s consent, the pressure is back on him.

But Oli also knows Nepal can’t afford to antagonize both neighbors at once. Push too hard against India, and trade routes close. Push too hard against China, and maybe those currency notes never get printed.

As former ambassador Nilamber Acharya has highlighted: don’t expect Oli to magically solve Lipulekh at the SCO or in a single meeting with Modi. Real progress, he says, will come from slow, careful diplomacy; building a stronger foreign ministry, backing Nepal’s claims with serious research, and keeping the issue alive in every bilateral meeting.

Still, perception matters. Oli built his image by staring India down. If he backs off now, he might end up exposing his hypocrisy; that his nationalism was more bark than bite. Either way, when Trump is busy dreaming of a Nobel Prize, Oli might actually be losing sleep over Lipulekh.

The Geopolitical Irony

So let’s recap this strange chain of events:

1. Trump wanted to punish India for buying Russian oil.
   

2. India, under pressure, decided to strengthen ties with China.
   

3. India and China reopened Lipulekh for trade.
   

4. Nepal, which had legally incorporated Lipulekh into its Constitution, was not consulted; again.

In short: a tariff war launched in Washington has rekindled an old border dispute in the Himalayas.

That’s geopolitics in action: what starts as a conflict in North-East Europe ends with a sovereignty crisis on the slopes of Asia.

What Happens Next?

For Nepal, three things are on the table:

• Diplomatic Notes: Already issued to both India and China, reiterating its claims.
  

• Currency Politics: The “Chucche Naksha” currency note plan could become a pressure point if China refuses to print.
  

• Trilateral Dialogue: The only sustainable solution, but the hardest to achieve. Neither India nor China has shown interest in including Nepal as an equal partner in their deals.

For India, the gamble is about balance. It can’t alienate the U.S. completely, but it also can’t afford to let China dominate regional trade. Lipulekh is a symbol of both defiance and compromise.

For China, it’s about subtle leverage. Every time India uses Lipulekh without Nepal’s consent, Beijing strengthens its hand by showing Kathmandu: “We can decide whether to recognize your map or not.”

And for the U.S.? Trump may not even realize the Himalayas are now part of his tariff war’s fallout. But whether he cares or not, his tariffs have reshaped the triangle of India, China, and Nepal.

Closing: The Fault Line in the Clouds

The Lipulekh dispute is a living reminder of how global politics trickle down into the most remote corners of the world.

A pass at 17,000 feet, once used by traders carrying salt and wool, is today a fault line connecting Russian oil, U.S. tariffs, India-China rivalry, and Nepali sovereignty.

For Nepal, the fight is more about whether small nations can ever shape their destiny in a world where giants cut deals over their heads.

And in this round, the unlikely trigger wasn’t Beijing or New Delhi. It was Donald Trump.