India and Nepal have a new opportunity to collaborate on development and energy security.
Indian External Affairs Minister Sushma Swaraj’s visit to Kathmandu, scheduled this week, is being viewed with some hope and fear. Hope, because there may be clues offered about what India’s political change means for Nepal. Also, her visit will lay the ground for Prime Minister Narendra Modi’s visit — the first bilateral visit to Nepal by an Indian PM in 17 years. Some ministers in Nepal are being told by Indian officials to prepare a wishlist, as Modi is keen on making a “generous offer”.
Fear, because Nepalese officials are concerned about the “unequal” draft of the power trading agreement that India has sent. They assert that India is more keen on an unfair control over Nepal’s rich water resources rather than exploring opportunities for equal benefit, with due recognition to Nepal’s status as an upper riparian country. Apart from the hydro-power projects, an agreement on the revised extradition treaty, mutual legal assistance and the settlement of border disputes top the agenda during Modi’s visit, expected soon although the date isn’t finalised. In sum, there is hope about Modi and his government, and fear of the bureaucratic machinery that deals with Nepal on a day-to-day basis.
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Modi is largely seen as a welcome change by the people of Nepal. Someone as strong as Nehru in that he is a strong personality, with control over his government and a sound party organisation, and different from Indira Gandhi in that she became stronger at the cost of her party organisation. I.K. Gujral is seen more as an ideal PM in the neighbourhood for advocating non-reciprocity in dealing with India’s smaller neighbours. But his short tenure and poor hold on the bureaucracy reduced his wish to a mere slogan. How Modi blends all those factors and his own approach will establish his image in the neighbourhood and in Nepal — a country with enormous geostrategic significance. India, especially post-2005, has lost its traditional respect and clout in Nepal because its bureaucracy and intelligence agencies are dabbling more in Nepal’s internal politics, in a prolonged period of transition and uncertainty.
Hawks in the previous UPA regime, who still influence the course of Nepali politics through their allies here, believe a constitution delivered on time alone will ensure political stability. That sounds too simplistic. Nepali actors, meanwhile, did not maintain even minimal contact with the BJP, which they believed was against the “radical changes” in Nepal — republicanism and secularism — being institutionalised.
A couple of weeks ago, S.D. Muni, who played a crucial role in bringing Nepal’s Maoists to the Indian PM’s office, warned on Twitter that Modi should restrain forces within the BJP favouring the restoration of the monarchy and Nepal’s return to its former status of a Hindu nation. He also asked Swaraj to ignore such forces when she visits Nepal.
But the real challenge lies in exploring the prospects of prosperity together. Past collaboration on hydel power failed to generate the needed trust between the two neighbours. In 1996, Nepal and India signed the Pancheshwar Multipurpose Project (PMP) deal as part of the Mahakali Treaty. Almost two decades later, not even the detailed project report has been finalised, bringing into question the sincerity of the two governments about working together. The costs of non-execution, of agreed projects, has taken a toll on the credibility of Nepal-India cooperation.
More problems lie in Nepal. India’s power trading draft, sent to the ministry of energy in Kathmandu, has not yet been circulated to other departments, including the PM’s office. “It is time, Nepal transformed itself into a dignified trading partner instead of continuing as a dependent,” says Bhekh Bahadur Thapa, a senior diplomat. Some say Nepal should solicit the partnership of other countries as well for smaller projects, but should sign the power purchase agreement with India on mutually beneficial terms. An official assessment shows that around 15,000 MW of power purchase by India at current rates will neutralise Nepal’s ever-increasing trade deficit with India.
“From a developmental perspective, Modi’s emergence in India is the best thing to happen for Nepal. India should give up its usual coercive tactic, both independent and sovereign countries should hold a straightforward discussion to explore their bright future together,”says former PM Kirtinidhi Bista, adding, “Let us involve India and China for the generation of hydro power that both India and Nepal need so badly.”