Nepal Prime Minister Sher Bahadur Deuba’s recent three-day visit to India has yet again brought the focus back to Indo-Nepal relations, which had been on a shaky ground for quite some time but are now showing definite signs of improvement.
Nepal shares a border of over 1,850 km with five Indian states — Sikkim, West Bengal, Bihar, Uttar Pradesh and Uttarakhand. But more importantly, the two countries share ancient links with each other, thanks to a porous border and close ties between its peoples. The age-old “Roti-Beti” relationship between the two nations has meant that citizens often cross over for livelihood, marriage etc. The fact that Hindus constitute over 80 per cent of the population in both countries has also cemented these ties to a certain extent.
But for some time now, these relations were getting frayed, especially since 2015, when a major territorial dispute erupted between the two countries over the Lipulekh region.
Basically, India and China had agreed to develop transit and trade via this region, which Nepal claimed was a violation of its territorial integrity.
In the same year, another tension cropped up between the two neighbours. Nepal adopted a new, democratic constitution, which was being opposed by the Madhesi parties in the country. A 135-day long agitation near the Indo-Nepal border followed, which, according to the Indian government, created security issues and hampered the supply of fuel and basic commodities to the Himalayan country.
Other minor issues have also plagued the countries’ relations. For instance, Indians need work permits to get employment in Nepal. Also, vehicles with Indian number plates face many difficulties in the country. A kind of trust deficit has been hampering the progress of many India-led projects there.
However, matters have not all been dire. India has a Neighbourhood First Policy and to honour that, Prime Minister Narendra Modi has visited Nepal four times during his tenure. Not only that, Nepal PM Deuba’s recent tour was the fifth time he has visited India. The two leaders have launched multiple projects this time around, giving a fresh impetus to the countries’ relations.
In a first, the PMs inaugurated a 35-km cross-border rail link from Jayanagar in Bihar to Kurtha in Nepal, and also a passenger train service, built under India’s Grant Assistance.
Another project that has been launched under the Government of India’s Line of Credit is the Solu Corridor 132 KV Power Transmission Line and Substation. The project will be completed at a cost of Rs 200 crore.
On the occasion, PM Modi said, “We also agreed on the subject of greater participation by Indian companies in Nepal’s hydropower development plans. It is a matter of happiness that Nepal is exporting its surplus power to India. It will contribute well to the economic progress of Nepal.”
“PM Deuba is an old friend of India. He has played an important role in developing India-Nepal relations. The friendship between India and Nepal, relations between our people is an example that can’t be seen anywhere else in the world,” he added.
The leaders also launched financial and payments service system RuPay in Nepal. “The introduction of RuPay card in Nepal will add a new chapter to our financial connectivity. Other projects like Nepal Police Academy, Integrated Check Post in Nepalganj, Ramayana Circuit etc., will also bring the two countries closer,” PM Modi said.
Further, the leaders reviewed the progress in construction of 132 health facilities in Nepal, being done under the $50 million post-earthquake reconstruction grant. On India’s 75th Independence anniversary, the country will also launch as many as 75 development projects in Nepal. Besides, the two PMs agreed to speed up the progress in the implementation of the Pancheshwar Multipurpose Project. Regarding the border dispute, reportedly, both sides agreed that the issue should be addressed in a responsible manner through dialogue and politicisation should be avoided at any cost.
This India-Nepal bonhomie is especially pertinent in view of China’s faltering closeness to the Himalayan country. In May 2017, Nepal and China had inked an agreement under China’s flagship Belt and Road Initiative (BRI) for several infrastructure projects in Nepal.
Then in 2019, Chinese President Xi Jinping visited Nepal and it seemed things were progressing. Feasibility studies for a cross border rail and a high-voltage power transmission line between the neighbours were also on the anvil.
But despite huge expectations, no substantive progress was made in any of these projects. At least nine projects were shortlisted under the BRI framework but not a single one has kicked off.
Reportedly, the bone of contention is that Nepal wants either grant assistance or a concessional loan from China while China prefers a commercial loan. Also, a recent $500 million US grant to Kathmandu has really irked the Red Dragon. The grant was given under the Millennium Challenge Corporation (MCC), which China claims is a part of the US strategy to contain China.
The glacial speed at which the BRI projects are proceeding made China focus on the more political aspects in Nepal, but it made the grave mistake of focussing on only one party, the Nepal Communist Party (NCP). This has left the other parties, especially the opposition Nepali Congress (NC), on the side-lines.
Meanwhile, India and Nepal are going from strength to strength. During the pandemic, India provided one million vaccine doses to Nepal as grant assistance and earlier this year, agreed to provide help to build a motorable bridge across the Mahakali river in Nepal. This carries huge significance as the river marks the boundary between the two countries.
Also, since coming to power, Nepali PM Deuba, who is fighting for another term as the PM, has made several active attempts to reach out to New Delhi. Recent trends in the countries’ bilateral relations are encouraging. For instance, bilateral meetings have become more regular, and hurdles are being cleared in many pending projects. Even as the Nepal-India relations are largely governed by people-to-people relations, the importance of government-to-government relations cannot be denied now. And it seems, the two countries are on just the right track.