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EDITORIAL ANALYSIS–India – Nepal relations

The Editorial covers GS paper 2 [India and its neighbourhood- relations.]

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Context

The new political map of India, recently released by the government to account for the bifurcation of Jammu and Kashmir, has triggered fresh protests over an old issue in Kathmandu.  India - Nepal relations have taken a few hits in recent years.

What is the background?

  • Kalapani is a territory disputed between India and Nepal, but under Indian administration as part of Pithoragarh district in the Uttarakhand state. 
  • The valley of the Kalapani forms the Indian route to Kailash–Manasarovar, an ancient pilgrimage site. 
  • Kalapani lies at a tri-junction of India, China and Nepal, on the dividing line of the Kali River watershed and Tinkar River watershed.
  • The Treaty of Sugauli signed by Nepal and British East India Company in 1816 defines the Kali River as Nepal's western boundary with India. 
  • However, what is meant by "Kali River" in the upper reaches is unclear because many mountain streams come to join and form the river.

What is the dispute of ‘Susta’?

  • Susta is an area under territorial dispute currently in Triveni Susta, Lumbini Zone, Nepal and near Nichlaul, Uttar Pradesh, India.
  • Gandak forms the international boundary between Nepal and India [Bihar]. 
  • Earlier, Susta was on the right bank of the Gandak, which falls in Nepal. 
  • But, in due course of time, the river has changed its route and Susta now falls on the left bank of the Gandak, which is controlled by India.

What is the present phase of relationship?

  • Prime Minister Narendra Modi during his recent visit to Nepal declared Nepal to be the centrepiece of his government’s "neighbourhood first" policy.
  • PM inaugurated the Ramayan Circuit Bus Route that will connect Janakpur, Goddess Sita’s birthplace, to Ayodhya .
  • The foundation stone was led for the $1.4 billion Arun-3 hydropower plant in the east of the country.
  • In the fourth BIMSTEC Summit, Nepal and India signed a deal on the construction of the Raxaul-Kathmandu railway line.
  • India, which is Nepal's largest trading partner for both exports and imports, accounts for about 65.8% of the total trade deficit.
  • India currently grants duty-free access to Nepalese products with at least 30 percent value addition.
  • Nepal’s main imports from India are petroleum products (13.7%); motor vehicles and spare parts (13.1%); etc.
  • Indian firms are among the largest investors in Nepal, accounting for about 30% of the total approved foreign direct investments.

What are the major cooperation of India with Nepal?

  • A three tier bilateral mechanism established in 2008, to discuss issues relating to cooperation in water resources, flood management, inundation and hydropower between the two countries, has been working well.
  • Two mega hydropower projects – Upper Karnali and Arun III are being proposed.
  • India consented to grant access to the inland waterways- Kolkata-Kalighat, Raxaul; Kolkata-Sahebgunj, Biratnagar and Kolkata-Varanasi-Raxaul routes in Ganges river connecting the seaport of Haldia, Kolkata.
  • Recently, South Asia’s first cross-border petroleum products pipeline was inaugurated from Motihari in India to Amlekhgunj in Nepal. 
  • Apart from grant assistance, Government of India has extended Lines of Credit of USD 1.65 billion for undertaking development of infrastructure, including post-earthquake reconstruction.
  • In 2018, the ‘India-Nepal New Partnership in Agriculture’ was launched with a focus on collaborative projects in agricultural research, development and education. 
  • India has been assisting the Nepal Army (NA) in its modernisation by supplying equipment and providing training.
  • The ‘IndoNepal Battalion-level Joint Military Exercise ‘SURYA KIRAN’ is conducted alternately in India and in Nepal.
  • India is currently supplying a total of about 600 MW of power to Nepal. 
  • Agreement on ‘Electric Power Trade, Cross-border Transmission Interconnection and Grid Connectivity’ between India and Nepal: The Agreement provides a framework for power trade between the two countries.
  • Around 6,00,000 Indians are living/domiciled in Nepal. These include businessmen and traders professionals (doctors, engineers, IT personnel) etc.
  • Many Hindu and Buddhist religious sites are in Nepal making it an important pilgrimage site for large number of Indians. Cross-border marriages are also quite common.

What is the significance of the bilateral relations?

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  • Nepal shares a border with 5 Indian states- Uttarakhand, Uttar Pradesh, West Bengal, Sikkim and Bihar. If India wants prosperity in Indian States, Nepal is a powerhouse economy potentially because it is so resource-rich.
  • Nepal is right in the middle of India’s ‘Himalayan frontiers’, and along with Bhutan it acts as buffer states against any possible aggression from China.
  • Rivers originating in Nepal feed the perennial river systems of India in terms of ecology and hydropower potential. 
  • Military diplomacy: Over 50,000 Nepalese Gorkha soldiers are in the Indian army.
  • India is Nepal’s largest trading partner. 
  • India has provided transit facility to Nepal for the third country trade. 
  • It has played a critical role in all the political transformation in Nepal.
  • Both the countries have been deeply engaged in the regional and sub-regional frameworks of SAARC, BIMSTEC and BBIN for enhancing cooperation for greater economic integration.

What are the challenges?

  • China has overtaken India in FDI to Nepal which was about $300 mn in 2018. 
  • As India failed to deliver on its infrastructure commitments in time, Nepal gravitated towards China, especially in the hydropower sector. 
  • Xi Jinping’s recent visit to Kathamandu was defined by the determination to accelerate the development of an ambitious trans-Himalayan corridor between China’s Tibet and Nepal. 
  • Nepal signed a Belt and Road framework agreement with China:  The CNEC is more strategic than economic, especially its envisaged outreach to Lumbini which will breach India’s red line on Chinese activities in Nepal. There is a Chinese military threat to India through Nepal in the gangetic plains.
  • Nepal and China have finalized the much-awaited protocol of the treaty, paving the way for Nepal to use Chinese ports Tianjin, Shenzhen, Lianyungang and Zhanjiang open seaports and Lanzhou, Lhasa and Xigatse dry ports for trade. 
  • Nepal is keen to continue a policy of dynamic balancing and make the best of the possibilities with both China and India.
  • India has often meddled in Nepal’s domestic politics, sometimes by preying upon its landlocked status. India imposed blockade on Nepal in 1962, 1989, and (unofficially) in 2015 after the country promulgated a controversial new constitution. 
  • Indo-Nepal border is virtually open and lightly policed which is exploited by terrorist outfits and insurgent groups from North Eastern part of India eg. supply of trained cadres, fake Indian currency. 
  • The fear in Nepal is that as a part of the Indo-Pacific Strategy, India and the United States will work in tandem to limit China’s role in Nepal. 
  • Nepal declined to participate in the first BIMSTEC military exercise MILEX-18 organized by India.

Conclusion

India has to focus on implementation and delivery on the three key three of rail connectivity, developing inland waterways, and agriculture to address growing competition from China in its neighbourhood in general and Nepal. India can build on the natural geographic and cultural interdependence between the two nations which must be based on sovereign equality and mutual benefit.

India should leverage its soft power from a shared culture that has been nurtured over the course of more than two millennia.  Geography, including the open border, for one, is in India’s favour. Winning back Nepal and the confidence of its people is the challenge.

Source:The Diplomat.