That Nepali traders have been helping Maoists buy pistols, rifles, combat uniforms, medicines and food materials through the Khasa border has been reported time and again, but the government has turned a deaf ear and a blind eye to the matter. The clandestine arms trade was not reported by businessmen or security sources but by porters.

The dealers are allegedly working closely with key Maoist leaders around Tatopani. Even personnel from the immigration department and the police force have been implicated. Khasa has remained a trade route not only for the Maoists but for Indians as well. Security sources say that Islamic militant organisations use the area to get new AK47 rifles. Sources say that while the Maoists used high altitude villages in Dolakha and Sindhupalchok to bring in Chinese munitions, they have been using local dealers to smuggle in other supplies through different entry points on the Arniko highway.

Besides villages like Panchkhal and Barabise, police offices have been removed from Dolalghat, Balefi and Kharichaur. The market places in these towns are completely under Maoist control, making it easy for the rebels to contact traders and financial supporters. After the Chinese border security forces arrested a group of arms smugglers, Nepal's district security force in Sindhupalchok showed interest in nabbing traders and financial supporters.

One of the smugglers arrested recently is a known Maoist worker, Hiralal Shrestha from Sindhupalchok. Shrestha is just an ordinary committee member of the Maoist party in Sindhu-Dolakha but the mafia, in a bid to protect the bigger players, has made Shrestha a scapegoat. Dozens of businessmen and political leaders of Sindhupalchok and top Maoist leaders are major suspects in the case. Vigilance by the security forces has tightened along the route and a close eye is being kept on transactions of traders of Tibetan origin from Chetrapati and New Road in the Valley.