Economic emphasis: On India-Nepal ties

Few countries have more intimate relations than Nepal with India as they share an open border that allows their nationals to move freely. Their relationship is characterised by close economic, security and cultural ties. India remains a major trade and transit partner, where a number of Nepalis continue to earn a living or pursue higher education. Good ties with Nepal, meanwhile, help India address security and geopolitical issues in its neighbourhood more smoothly. Yet, their political relationship, in the near past, has gone through more ebbs than flows, largely due to a border dispute over the Kalapani area. A change of government in Nepal with the fall of the hawkish regime led by Khadga Prasad Sharma Oli and the restoration of the pre-2022 election Nepali Congress and Maoist alliance to power raised expectations of a thaw in this matter. During a four-day India visit by Nepal Prime Minister Pushpa Kamal Dahal last week, this irritant in ties was not delved upon, and that in itself could count as a positive measure to move towards relative bonhomie. More importantly, economic ties received a fillip with progress in expanding cooperation in power sector development and trade. The finalisation of an agreement to increase the export of power from Nepal to India to 10,000 MW within 10 years, development of new transmission lines, an MoU for the construction of a petroleum supply pipeline between Siliguri and Jhapa, besides extensions to existing pipelines and construction of new terminals were positives. But the highlight of Mr. Dahal’s visit was an agreement to take forward the Indian proposal of the export of Nepal’s hydropower to Bangladesh through Indian territory.

The success of Mr. Dahal’s visit would be assessed when these agreements come to fruition, but the progress made in recent Indian ventures such as in rail connectivity and hydroelectric projects should be encouraging. New Delhi’s emphasis on expanding ties by taking a focused approach on development projects contrasts well with the high sounding but less viable Chinese forays into infrastructure projects in Nepal. Besides, it has suited the Indian government to take a less intrusive approach to the complicated internal political dynamics of Nepal in recent years, especially after the perceptions of Indian interference in the Madhesi agitations of the last decade, led to hyper-nationalists fanning anti-India rhetoric. While the emphasis on economic ties should keep the relationship in good stead, the governments cannot just put the border issue on the back burner and expect it to be sorted out. Modalities to discuss the issue and seek a lasting solution should be a priority, going forward.