The Kathmandu–Lhasa entrepot (Lhasa Newars)ल्हासा नेवार व्यापार

If the salt–grain barter was the trans-Himalayan trade's body, the Kathmandu Valley was its head. Sitting astride the two lowest practical crossings of the central Himalaya — Kuti and Kyirong — the Malla city-states grew rich as the obligatory middlemen between the Gangetic plains and Lhasa. In the mid-17th century King Pratap Malla of Kathmandu attacked Tibet twice; a force led by his brother Bhim Malla advanced toward Shigatse before the Dalai Lama's deputies negotiated a settlement that institutionalised the position: 32 Newar trading houses in Lhasa exempt from taxes and duties, and the exclusive right to strike Tibet's silver coinage. Minting was itself a profitable trade — Tibet supplied the silver and paid in gold, and all three Malla kingdoms of the Valley struck mohars that circulated as legal tender in Tibetan markets, carrying Nepal Sambat dates, salutations to Taleju and Karunamaya, and emblems from the thunderbolt and trident to the eight auspicious symbols. The arrangement underwrote the Malla golden age whose pagoda temples and palaces still define the Valley.

The same coinage destroyed the old order. Malla kings, squeezed for revenue, debased the mohar; Tibetan merchants began refusing Nepali coins or demanding premiums, giving the new Gorkha state both grievance and pretext for the Nepal–Tibet War of 1788–1792 — fought up the very trade corridors of Kuti and Kerung. The Kerung Treaty, signed on 2 June 1789, made Tibet promise annual tribute, but Tibet's default brought Qing intervention (1791–92) under General Fuk'anggan, an army within 35 km of Kathmandu, and the Treaty of Betrawati (1792), which ended Nepal's coinage-privilege era, put the trade under Qing supervision and obliged Nepal to send quinquennial missions to Beijing. Yet the trade proved resilient: after Jang Bahadur's 1855–56 war, the Thapathali Treaty of 24 March 1856 restored duty-free trade (Article 3), the right to open shops in Lhasa trading “gems, jewelry, clothing, food” (Article 6), a Nepali officer stationed at Lhasa — pointedly “not a Newar” (Article 5) — and an annual payment of Rs 10,000 from Tibet to Kathmandu.

The trade's last golden age was an early-20th-century wool boom routed not through Nepal at all but through British India: after 1904 the Newar houses ran the Lhasa–Kalimpong caravan trade — a three-week mule journey via Gangtok over the Nathu La and Jelep La — shipping Tibetan wool, yak tails and musk toward Calcutta and importing factory goods. Families like the Kansakars and Tuladhars kept kothis on Lhasa's Barkhor: the trader Bhajuratna Kansakar, who started out in Kalimpong, established his Lhasa Kothi in 1939 at a shop rent of 15 rupees a month, and by the 1940s millions of demonetised Malla-era coins were moving by mule caravan from Tibet to Kolkata as bullion. Sons spent decades on the plateau — the trade's social cost is remembered in Nepal Bhasa ballads of wives left behind.

The 1950 Chinese takeover squeezed the business, and the 1962 Sino-Indian War severed its Indian artery overnight. The “Lhasa sahus” packed up generations of inventory and came home by the mid-1960s, closing a chapter that had run for three centuries and leaving Nepal's claim to one of Asia's oldest continuous mercantile diasporas. The era's memory survives in works such as Kamal Ratna Tuladhar's Caravan to Lhasa: A Merchant of Kathmandu in Traditional Tibet (2004), based on his father Karuna Ratna Tuladhar's seventeen years in Lhasa — and, popularly, in the momo, which Newar traders are credited with bringing down from Tibet.