By Ramaswami R Iyer
India-Nepal relations are constantly being upset by insensitivity and blundering on the part of India and hypersensitivity and proneness to misunderstanding on the part of Nepal. India seems to have an infinite capacity for putting its foot wrong in relation to Nepal, and Nepal seems to have an equal capacity for misreading ineptness as diabolical machination. The relationship is a thoroughly dysfunctional one. Because of that background, I had at one time cautioned against attempts to negotiate new treaties or agreements, which would only serve to generate fresh misunderstandings, and observed: “Do not seek excessive closeness; let not Nepal feel threatened; aim at friendliness, correctness and a reasonable distance.” At that time, many friends felt that, given the geography and history of the two countries, a relationship of “correctness and distance” was not an option.
What I had said then is being strikingly illustrated by a current development. There is much anger and indignation in Nepal over a draft agreement on cooperation in the power sector proposed by India. It has been described as “hegemonic”. It is alleged that India wants monopoly over the power sector in Nepal. The former water resources minister, Laxman Ghimire, is reported to have termed the proposal “an insult to Nepal”. This contretemps, just before the Indian external affairs minister’s visit that began on Friday, was both unfortunate and entirely avoidable.
The draft agreement proposed by India is mostly innocuous. It talks in general terms about cooperation on investment in power generation and power purchase. It is for Nepal to say whether it wants an agreement at all. India cannot compel Nepal to enter into an agreement. If it is prepared to look at a draft agreement, it could propose any amendments it wants, or propose an alternative draft altogether. Why then is there so much anger? It arises essentially from the Nepalese understanding or misunderstanding of a couple of clauses in the draft. These are:
One, “The government of Nepal will facilitate the sale, and government of India will facilitate the purchase, by interested Indian entities, of surplus power, that is the power over and above what is required for use in Nepal, generated from power projects, including hydroelectric projects developed in Nepal, on mutually agreed terms and conditions.”
Two, “In particular, the parties shall cooperate in effective harnessing of Nepal’s hydro-power potential through facilitation and speedy construction of hydroelectric power projects in Nepal either with 100 per cent Indian investments or joint venture with Indian entities.”
These have evidently been interpreted to mean, first, that Nepal must sell all its surplus power to Indian entities; and second, that Nepal must necessarily accept 100 per cent investment in hydro-power projects by India, and is not allowed to invest in hydro-power projects entirely on its own, or in JVs with non-Indian entities.
I presume the government of India meant only to offer 100 per cent Indian investment in hydro-power projects in Nepal and not to force such Indian investment on Nepal. Indeed, how can it do so? As for the purchase of power, I doubt India intended to ask for exclusive rights to all surplus hydro-power in Nepal. However, regardless of Indian intentions, the apprehensions in Nepal are understandable. The interpretations they have placed on those two clauses are not totally implausible. If the draft had been carefully re-read within the Indian government, the possibility of a misunderstanding could have been anticipated and averted.
Now that anger has been generated in Nepal, what can be done to assuage it? My suggestion is that the draft agreement should be immediately withdrawn, and Nepal assured that its interpretations are based on a misunderstanding of Indian intentions. It could also be left to the Nepal government to propose a draft, if they so wish. In other words, instead of breathing down Nepal’s neck, India might leave it to Nepal to take the initiative, if they wish to. By these means the fraught situation could still be saved, and the relationship salvaged.
The writer, former secretary of water resources, Government of India, is honorary research professor, Centre for Policy Research, Delhi.