India – Nepal Relations

WHY IN NEWS?

• Nepali Prime Minister Sher Bahadur Deuba’s made a three-day visit to India on April 1-3, 2022.
• Deuba’s visit comes at a critical juncture. Nepal’s relations with India have been on a low ebb for the last few years.
• There has been little high-level communication between the two countries in recent years.
• Moreover, Nepal is caught in the middle of a geopolitical tussle between China and the United States.

HISTORY:

• Founded on the age-old connection of history, culture, tradition and religion, Nepal and India enjoy excellent bilateral ties.
• Nepal shares a border of over 1850 km with five Indian states – Sikkim, West Bengal, Bihar, Uttar Pradesh and Uttarakhand.
• The India-Nepal Treaty of Peace and Friendship of 1950 forms the bedrock of the special relations that exist between India and Nepal.

AREAS OF COOPERATION:

• Political:
  • There are regular exchanges of high-level visits and interactions between India and Nepal.
  • Example: Prime Minister Narendra Modi visited Nepal four times in six years.
  • Parliamentary exchanges:
    • Members and officials of Nepal’s Parliament often conduct study tours to India.
    • In 2019, the Federal Parliament of Nepal formed ‘Nepal-India Parliamentary Friendship Group’ to strengthen the cooperation.
  • Diplomatic:
    • Government of India has its Embassy in Kathmandu and a Consulate General in Birgunj (south-central part of Nepal).
    • Government of Nepal has its Embassy in New Delhi and a Consulate General in Kolkata.
• Economic:
  • Trade:
    • India is the largest trading partner of Nepal.
    • India has provided transit facility to Nepal for the third country trade.
    • Total bilateral trade in 2018-19 reached INR 57,858 crore.
    • Nepal’s main imports from India include petroleum products; motor vehicles, other machinery & parts and medicine.
    • Nepal is dependent on India for oil:
      • Nepal imports all fossil fuel energy from India.
      • In the first six months of the current fiscal year 2021/22, Nepal imported around USD 1 billion worth of diesel, petrol, and liquefied petroleum gas. This accounted for 12 percent of Nepal’s total imports and was crucial in increasing Nepal’s USD 5 billion trade deficit with India.
  • Investment:
    • Indian firms are among the largest investors in Nepal, accounting for more than 30% of the total approved foreign direct investments.
• Defence:
  • India has been assisting the Nepal Army in its modernisation by supplying equipment and providing training.
  • Assistance during disasters, joint military exercises and bilateral visits are other aspects of India’s defence cooperation with Nepal.
  • Eg: The Indo-Nepal Joint Military Exercise SURYA KIRAN is conducted alternately in India and in Nepal.
  • The Gorkha regiments of the Indian Army are raised partly by recruitment from hill districts of Nepal.
• Disaster management:
  • Following the devastating 2015 earthquake, India swiftly dispatched National Disaster Response Force (NDRF) teams and special aircrafts with rescue and relief materials to Nepal. India is also providing grants to support reconstruction.
  • During the Pandemic, India provided one million doses of Oxford-AstraZeneca’s Covishield vaccine to Nepal as grant assistance.
• Connectivity and Developmental partnership:
  • India’s development assistance to Nepal focuses on creation of infrastructure in the areas of connectivity, health, water resources, education and rural & community development.
  • Examples: B.P. Koirala Institute of Health Sciences, Dharan
  • Border infrastructure:
    • In recent years, India has also assisted Nepal in development of border infrastructure. Eg: Integrated Check Post at Birgunj (Nepal)
  • Railway:
    • India financed Kurtha-Jayanagar passenger railway. In 2022 >> the railway is to be extended to Dhalkebar in Nepal.
  • Air connectivity:
    • Nepal requested India to provide three additional entry routes and also requested an agreement on near-border operation for the Gautam Buddha International Airport.
    • The airport, located less than 10 kilometers from the Indo-Nepali border, will start operations from May 2022.
• Water resources:
  • A three-tier bilateral mechanism was established in 2008 to discuss issues relating to cooperation in water resources, flood management, inundation and hydropower between the two countries.
• Energy cooperation:
  • Power Trade Agreement:
    • An important Power Trade Agreement was signed between the two countries in 2014 paving way for the power developers of the two countries to trade electricity across the border without restrictions.
  • Electricity trade:
    • Nepal became an energy surplus country (during monsoon) in July 2021.
    • As a result, it started selling 39 MW of electricity to India via the Indian Energy Exchange.
  • Joint Vision Statement on Power Sector Cooperation:
    • The agreement highlights development of cross-border transmission infrastructure, and bi-directional power trade based on market demand.
    • Based on this, India has allowed Nepal to export an additional 325 MW of electricity from July 2022.
    • It could also form a key stepping stone to subregional energy trade between Bangladesh, Bhutan, India and Nepal (BBIN).
  • Collaborative projects:
    • The two countries have undertaken various collaborative projects such as the Lower Arun Hydropower Project, Upper Karnali and Trishuli Hydropower Station.
  • Cooperation in oil
    • It is promoted through South Asia’s first cross-border petroleum products pipeline, constructed by Indian Oil Corporation, connecting Motihari in India to Amlekhgunj in Nepal.
• Human resource development:
  • India provides around 3000 scholarships/seats annually to Nepalese nationals for various courses at the Ph.D/Masters, Bachelors and plus–two levels in India and in Nepal.
• Culture:
  • B.P. Koirala India-Nepal Foundation
    • It was set up in 1991 to foster educational, cultural, scientific and technical cooperation between India and Nepal.
  • Swami Vivekananda Centre for Indian Culture:
    • It was set up in Kathmandu in 2007 to showcase the best of Indian culture.
  • Other cultural agreements:
    • Besides these, Agreements have been signed between cultural institutions such as Sahitya Kala Akademi and Nepal Academy, and between Doordarshan and Nepal TV.
  • Connecting Hindu culture:
    • Nepali Prime Minister Sher Bahadur Deuba recently visited Varanasi.
    • Varanasi, a Hindu holy city, is the foremost religious and political center of Nepal outside the borders of Nepal.
    • So the visit was calibrated to connect both countries on Hindu cultural tradition as well as to address rising Hindu nationalism in Nepal
• Diaspora:
  • Around 6,00,000 Indians are living in Nepal and 8 million Nepalis work in India.
  • Nepalese citizens avail facilities and opportunities on par with Indian citizens in accordance with the provisions of the Treaty.
• Multilateral and Regional Fora:
  • Both Nepal and India have common approach to regional and multilateral institutions and hence, work in tandem in the United Nations, Non-Alignment Movement and other international fora.
  • Furthermore, both the countries have been deeply engaged in the regional and sub-regional frameworks of SAARC, BIMSTEC and BBIN.

STRAINS IN THE RELATIONSHIP:

• Border disputes:
  • In 2020, ties between the two soured after both countries published maps in which they included Kalapani, Lipulekh, and Limpiyadhura region in their side of the territory.
  • India, which has adopted a delaying tactic on the border dispute, benefits from having de facto control over the disputed territory.
  • To know more about India - Nepal Border Issue
• Anti-India sentiments:
  • Criticism over India’s “Big Brother” behaviour, border disputes, India’s criticism of Nepal’s 2015 constitution and subsequent blockade, supplemented by narratives from China-backed political parties have created strong anti-Indian sentiments. This trust deficit hinders effective cooperation.
• China factor:
  • China has been actively pursuing outreach with the political parties and has begun to play a visible role in Nepal’s domestic politics.
  • Its economic weight positions it as a potential development partner and Nepal has enthusiastically joined in the Belt and Road Initiative.
• Nepal is caught in the middle of a geopolitical tussle between China and the United States:
  • India was curiously absent from the geopolitical debate in Nepal in the last couple of years.
  • The toxic debate on the Millennium Challenge Corporation (MCC), a USD 500 million grant from the U.S. to improve Nepal’s power and road networks, brought the Sino-American global competition to the fore, casting a shadow on other interests.
  • Indo-American interests do not converge as much in dealing with small South Asian countries as they converge in their concern of rising China. Thus, India has concerns about increased US. influence in Nepal, as it could lead to a relative decline in its influence
• India’s reluctance to engage:
  • Nepal and India had formed an eight-member (four from each country) Eminent Persons’ Group (EPG) in 2016.
  • The Group was tasked to study outstanding issues in India-Nepal relations and offer suggestions for the way forward.
  • Although the EPG submitted its report in 2018, Prime Minister of India has consistently refused to receive it. Some argue that this is a reflection of India’s reluctance to accept Nepal as a sovereign equal and an indication of its interest in continuing the unequal relations based on the 1950 Treaty of Peace and Friendship.
• Internal security concerns:
  • With Nepal and India sharing a porous border, India has always been suspicious about the possibility of terrorists and traffickers using the border to cause harm to India.
• Political instability:
  • With 28 governments in the past 32 years, Nepal continues to remain hostage to petty party politics, which has prevented the realization of any significant developmental progress. 
• Delayed completion of projects:
  • The issues between Nepal and India are affecting the implementation of various Indian-aided projects in Nepal.
  • Example: The recent border dispute has cast a shadow on the future of the proposed Pancheshwar multipurpose dam project.

WAY FORWARD

• Encourage talks:
  • Since Sher Bahadur Deuba came to power in Nepal, there have been several rounds of interactions between the two sides.
  • India needs to leverage on this and promote talks to find amicable solutions to the issues surrounding India-Nepal relations.
• Address boundary disputes:
  • A Joint Boundary Demarcation Committee could be appointed by both the countries to scientifically study the Maps and come to a conclusion diplomatically.
• Encourage balance relations:
  • Nepal’s dependence on India is more than India’s dependence on Nepal. To increase India’s dependence on Nepal, it is necessary to place the increase in trade and economic activities at the forefront.
• Increase energy trade:
  • Energy trade is mutually beneficial to both countries.
  • The trade enables Nepal to sell the surplus energy it produces and opens up an opportunity for it to reduce the burgeoning trade deficit with India.
  • It also ends Nepal’s asymmetric dependence on India for energy. Nepal imports all fossil fuel energy from India.
  • The International Energy Association expects India’s energy demand to increase by 35 percent by 2030.
  • Complicating India’s energy demand is its commitment at COP26 to reach net-zero emissions by 2070.
  • As India moves away from coal, it is searching for a massive supply of clean and renewable energy.
  • In this context, the additional supply from Nepal could help India bridge the gap.
• Adhere to non-interference:
  • India should maintain the policy of staying away from Nepal’s internal affairs should refrain from actions that antagonise the people of Nepal.
• Invest in hydropower:
  • Current hydroelectric power generation in Nepal is at 650 MW per annum, which is less than one percent of the proven potential.  
  • To utilize this and meet India’s rising demand for clean energy, investments in hydroelectric power needs to be made.
• Leverage regional platforms to foster cooperation:
  • Regional platforms like the BIMSTEC and the SAARC could be leveraged to foster cooperation in common areas of interest like technology-driven agriculture.
• Economic support:
  • To deepen its engagement with the Nepal, India needs to encourage its private sector enterprises (such as telecom and power) to increase investment in the region.
• Security cooperation:
  • Both countries should strengthen cooperation in areas of counter-terrorism, counter-radicalisation and drug trafficking, through measures like regular intelligence sharing and frequent joint security exercises.
• Improve connectivity
  • Efficient connectivity with India is topmost on Nepal’s agenda.
  • Connectivity needs to improve in air and land transport, as well as energy.

PRACTICE QUESTION:

Q. Nepal-India relations are deep, wide-ranging, and unique, but also fraught with complexities. Discuss