REVAMPING TIES

 India, Nepal Ink Key Pacts On Connectivity, Energy

     The bilateral summit between India and Nepal , the two sides launched an India-Nepal Joint Vision Statement agreed to launch plethora of initiatives that would give huge impetus to development partnership across sectors. They launched several connectivity and energy cooperation initiatives, including a cross-border passenger train, even as Nepalese prime minister Sher Bahadur Deuba urged his Indian counterpart Narendra Modi to take steps to resolve a boundary dispute.

    The focus of the meeting between the two prime ministers was on developmental cooperation, including a joint vision statement for power cooperation that envisages joint development of projects and transmission infrastructure. The 90-km-long 132-kilovolt (kV) Solu Corridor transmission line in Nepal, built with an Indian line of credit at a cost of Rs 200 crore, was also inaugurated. The two prime ministers also jointly launched the operationalisation of a 35-km cross-border rail link from Jaynagar in Bihar to Kurtha in Nepal, which had also become an irritant in India-Nepal ties. They also  launched the operation of RuPay cards in Nepal, intended to help promote the flow of Indian tourists to the Himalayan country. Nepal signed a framework agreement to join the India-led International Solar Alliance, and the two sides signed three more pacts – a memorandum of understanding (MoU) on enhancing technical cooperation in the railways sector, and two agreements between Indian Oil Corporation and Nepal Oil Corporation for the supply of petroleum products for five years and for sharing of technical expertise.

    Nepal’s relations with India, that plummeted to a historic low after the Indian blockade in September 2015, have yet to recover as Nepalis do not see relations with India improving any time soon. India’s refusal to accept demonetised bills with the Nepal Rastra Bank worth just INR₹7 crore and the unknown fate of the report submitted by the Eminent Persons Group (EPG) have not helped in securing it a better image in Nepal. The fact that passengers boarding flights from Nepal to India are still subjected to a pre-boarding security check even over 20 years after the hijack of an Indian Airlines aircraft, determines the perception of trust of India in Nepal. This is despite thousands of Nepalis serving in the Indian Army and Nepali villages expressing grief whenever violence escalates in India as many lose their lives defending a country that is not their own.

     The ties of friendship and cooperation between India and Nepal have been characterized by social, economic and political interdependence. India has continued to provide financial and material assistance to Nepal in its development ever since the 1950s. Through the decades, Indian investments in Nepal, both private and State-led, have been in a wide range of capacity building activities. Indian firms set up joint ventures with local Nepalese firms in various sectors such as manufacturing, banking, insurance, education, telecom, power, tourism. The Nepal-India Oversight Mechanism was set up after Prime Minister Modi's visit to Nepal in September 2016 to oversee the implementation and completion of bilateral projects. Ever since, India has taken steps to ensure quick execution and handover of development projects. 

      Geopolitics is a complicated challenge for Nepal, whose geography requires it to make best use of its position between China and India. The recent visit by the Chinese Foreign Minister, Wang Yi, to Nepal has resulted in a situation that everyone in Nepal is trying to decipher. The Chinese engagement has been very deep as seen in the anti-MCC campaign. U.S. grant and investment activities are seeing a revival post the MCC ratification and India does not want to see other powers active in Nepal. India’s active and sustained participation in propelling Nepal’s trajectory of growth is an affirmation of the proximity that the two nations share over principles of mutual interdependence and co-existence. The visit of Deuba, to India is an assertion of the developmental cooperation that underlies and guides bilateral relations between India and Nepal.