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This study on "India-China Trade under WTO and Its Impact on the Nepalese Economy" analyzes how the World Trade Organization-related trade policies of India and China performed mutually and affected the Nepalese macroeconomic parameters. The conclusions are, first, the Indian and Chinese underlying structure of production and demand, and the WTO-related policies have contributed to a synergy in their cooperation in trade, and they may soon move towards bilateral regional trade agreement / preferential trade agreements. There is need for Nepal to synchronize the Nepal-India Trade Treaty 2009, Nepal-China Trade Agreement 2010, and other trade and investment treaties. Second, Nepal´s gross national product and balance of payments would improve much strongly through the money market relations with India, and Indian foreign direct investment, gross national income, real exchange rates, custom duty rates, and tourism than through the Chinese ones. Finally, India and China are facilitating their reciprocal trade on goods much faster than is Nepal. The study lists a number of issues for further research in the areas of information base, modeling, and policy evaluation.

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Dr. Y. B. Thapa is Vice-Chairman of Nepal´s Poverty Alleviation Fund, Adjunct Professor in Agriculture and Forestry University, President of Nepal Agri-Econ Society, Chief-Editor of Nepalese Journal of Agri-Economics, and earlier he served as member of National Planning Commission, and UNDP/FAO expert for Nepal, Myanmar and SAARC Secretariat.

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