Central Idea

The four-day visit by Nepal Prime Minister Pushpa Kamal Dahal, who prefers to be called ‘Prachanda’ (his nom de guerre) was recently completed.

Hits and Misses of the Visit

[A] Hits

• Revised transit treaty: Nepal securing access to Indian inland waterways is a positive development as it will enhance Nepal’s connectivity and trade options.
• Power export to Bangladesh: The agreement allowing Nepal to export 40 MW of power to Bangladesh through Indian territory and transmission lines opens up new avenues for Nepal’s power sector and strengthens regional energy cooperation.
• Hydropower projects: The collaboration between Nepal and India’s public-sector companies, NHPC and Satluj Jal Vidyut Nigam, for the development of the Phukot Karnali Hydropower Project and Lower Arun Hydropower Project respectively, indicates cooperation in the renewable energy sector.
• Infrastructure development: The inauguration of the Gorakhpur-Butwal transmission line, the handing over of the Kurthea-Bijapur railway line, and the establishment of integrated checkposts (ICPs) at various border points are positive steps in improving connectivity and facilitating trade between the two countries.
• Petroleum infrastructure cooperation: The signing of an MoU for cooperation in petroleum infrastructure indicates a willingness to enhance collaboration in the energy sector.

[B] Misses

• Power export agreement duration: Nepal’s desire for a 25-year umbrella agreement to export power to India was not met, as only a ten-year agreement in principle was reached. The signing of a formal agreement has been deferred, which may be seen as a disappointment for Nepal.
• Airspace access to Bhairahawa Airport: Nepal’s request for Indian airspace access for commercial flights heading to Gautam Buddha International Airport at Bhairahawa was not fully met. The limited access granted for low-altitude flights is considered uneconomical for commercial jetliners, and Nepal feels India has not honored its earlier commitment to review the matter and facilitate commercial flights.
• Pancheshwar Multipurpose Project: Nepal’s concerns regarding the delay in preparing the detailed project report (DPR) for the Pancheshwar Multipurpose Project have not been addressed satisfactorily. Despite repeated agreements to have the DPR ready, the project has remained pending for 26 years.

Row triggered by a Mural in New Parliament

• Interpretation of the Mural and Anger in Nepal: The mural in Nepal’s new Parliament building, interpreted as Akhand Bharat or undivided India, has sparked anger and controversy among Nepali political leaders. Nepali leaders argued that it undermines Nepal’s sovereignty and cultural identity, particularly in relation to Lumbini.
• Historical Tensions, Border Disputes, and Impact on Bilateral Relations: The row over the mural evokes memories of the Kalapani dispute between India and Nepal. Historical tensions and ongoing border disputes contribute to the sensitivity of territorial claims and strain bilateral relations.
• Perception of Political Statement and Sensitivity of Sovereignty: Some view the mural as a political statement, suggesting India’s territorial ambitions and challenging Nepal’s independence. The controversy highlights the sensitivity of issues related to sovereignty and national identity.
• Cultural and Historical Significance: Prachanda himself argued that the mural represents cultural and historical aspects and should be seen as shared heritage rather than a political assertion. Respecting the territorial integrity of neighboring countries is essential.

India Nepal Ties: A Backgrounder

• Ancient ties: The relationship between India and Nepal goes back to the times of the rule of the Sakya clan and Gautama Buddha.
• Cultural relations: From 750 to 1750 AD period saw a shift from Buddhism to Hinduism in Nepal and witnessed widespread cultural diffusion.
• Diplomatic ties: India-Nepal Treaty of Peace and Friendship of 1950 forms the bedrock of the special relations that exist between India and Nepal.
• In recent years, India’s relations with Nepal have witnessed some ‘lows’. 

Various facets of India-Nepal ties

(1) Cultural ties

• While enjoying their own peculiarities, both India and Nepal share a common culture and ways of life.
• Religion is perhaps the most important factor and plays a predominant role in shaping the cultural relations between these two countries, marked by a cross country pilgrimage on Char Dham Yatra, Pashupatinath Temple and some Buddhist sites.

 (2) Strategic ties

• Nepal is a buffer state between India and China.
• Several Nepali Citizens are also deployed in Indian defence forces as well. Ex. Gorkha Regiment.

(3) Political ties

• Constitutional turmoil is not new in Nepal. India has played a vital role in the democratic transition in Nepal against the monarch King Gyanendra.
• Nepali Congress (NC) is one of the country’s oldest parties which supports relations with India, but the communist parties show a tilt towards China.

(4) Economic ties

• Nepal is an important export market for India. India is Nepal’s largest trading partner.
• Himalayan rivers flowing through Nepal can be used for hydroelectric power projects which will benefit Border States of UP, Bihar and other adjacent areas.
• Also, Nepal is the largest borrower of Indian Currency in South Asia. Nepal has escalating trade deficit with India.  

(5) Connectivity

• The 1950 Treaty of Peace and Friendship was sought by the Nepali authorities in 1949 to provide for an open border and for Nepali nationals to have the right to work in India.
• The BBIN Motor Vehicles Agreement (MVA) in which Nepal is a partner will permit the member states to ply their vehicles in each other’s territory for transportation of cargo and passengers.

(6) Multilateral and Regional Fora

• Both Nepal and India work in tandem in the United Nations, Non-aligned Movement and other international fora on most of the important international issues.
• Both countries have been deeply engaged in the regional and sub-regional frameworks of SAARC, BIMSTEC and BBIN for enhancing cooperation for greater economic integration.

China’s role in Nepal – A matter of concern

• Once considered a buffer state between India and China, Nepal is now showing an inclination towards Beijing.
• China is trying to stimulate and tempt Nepal with multiple aids, economic growth and acquisition.
• China has overtaken India as the largest source of foreign direct investment with the annual development assistance being worth $120 million.

India-Nepal Border Disputes: The Real Spoilsport

India and Nepal share about an 1800 Km long border. There are 2 major border or territorial disputes:

(1) Kalapani

• The Kali River in the Kalapani region demarcates the border between India and Nepal.
• The Treaty of Sugauli signed by the Kingdom of Nepal and British India (after the Anglo-Nepalese War) in 1816 located the Kali River as Nepal’s western boundary with India.
• The discrepancy in locating the source of the Kali River led to boundary disputes between India and Nepal, with each country producing maps supporting its own claims.

(2) Susta Region

• It is about 140 sq. km of land in Uttar Pradesh at the Nepal border in the Terai area. India has control of the territory. Nepal claims this territory.
• The change of course by the Gandak River is the main reason for disputes in the Susta area.

Issue of Simultaneous floods in Bihar and Nepal

• Some of Nepal’s biggest river systems originate in the Himalayan glaciers which then flow into India through Bihar.
• During the monsoons, these river systems flood causing many problems for Bihar.
• It is a necessity that there is process-driven coordination between the Centre and the Government of Bihar to handle the flooding in Nepal’s Terai and North Bihar (largely the Mithilanchal region).

Why Nepal is Important to India?

• Buffer to China: It acts as a strategic buffer against the aggression of China.
• Pakistan factor: peddling of FICN, drugs and terrorism through the Indo-Nepal border. It makes the cooperation of Nepal important.
• Common culture: There are huge Nepali communities in Darjeeling and Sikkim. Many marital relations across the border exist.
• National Security: There is a lot of interdependence. Gurkha Regiment in Indian Army is known for its valiance.
• Energy Security: Nepal has the potential of 80 GW of hydroelectricity. But only 600 MW potential is realized so far.

Major irritants in bilateral ties

• Nepali nationalism and Anti-India sentiments: Anti-India Sentiment in Nepal is largely politically motivated as it is wrongly perceived as India’s backing to Monarchy.
• China factor: Nepal’s assent for the ‘One Belt One Region’ (OBOR) initiative of China is viewed by India with suspicion. It has been slowly fallen prey to China’s inroad debt trap policy.
• India’s perception of Nepal: The reality is that India has ignored the changing political narrative in Nepal for far too long.
• Open borders: The issue of open borders has also been a point of debate in Nepal in recent years- Nepalese people argue that India is benefiting more from it than Nepal.
• Madhesis Issue: Madhesis share extensive cross-border ethnic and linguistic links with India. India’s involvement in Nepali politics and the upsurge in Madhesi have deep roots in history and unless resolved.

Way Forward

• Dialogues: In the best spirit of friendship, Nepal and India should restart the water dialogue and come up with policies to safeguard the interests of all those who have been affected on both sides of the border.
• Investments: TheBilateral Investment Promotion and Protection Agreement (BIPPA) signed between India and Nepal needs more attention from Nepal’s side.
• Sensitization: The onus is on India to rethink on a long-term basis how to recalibrate its relationship with Nepal provided Nepal should not ignore its relations with India.
• Strengthening Economic Ties: The power trade agreement needs to be such that India can build trust in Nepal.

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