India and Nepal recently unveiled several initiatives and agreements during the 4-day visit of the Prime Minister of Nepal to India. The focus of these measures is to bolster their bilateral cooperation in the fields of energy and transport development. The ultimate goal is to fortify ties between the two nations and enhance regional connectivity.
Key Highlights of the Recent Agreement
A significant part of the recent agreement was centered on power sector cooperation. India and Nepal embarked on a long-term Power Trade Agreement, aiming to import 10,000 MW of electricity from Nepal in future years. Key to this aspect were the Memoranda of Understanding (MoUs) signed for development of the Phukot Karnali Hydro Electric Project and the Lower Arun Hydro Electric Project. Furthermore, the Prime Ministers of both nations pledged their commitment towards progress on the Pancheshwar multipurpose project that focuses on harnessing shared water resources.
Enhancing Transportation and Connectivity
The Gorakhpur-Bhutwal Transmission Line was inaugurated alongside the introduction of an Indian Railway cargo train from Bathnaha to Nepal Customs Yard. This underlines the mission to improve connectivity between the two countries. Integrated Checkposts were introduced promoting smoother cross-border trade, facilitating the movement of goods and people.
Introduction of New Initiatives
Extensions were made to South Asia’s first cross-border petroleum pipeline from Motihari in India to Chitwan in Nepal. A revised Treaty of Transit was also signed to provide Nepal access to India’s inland waterways. There are also implementations in progress to set up a fertiliser plant in collaboration with India, highlighting the importance of agricultural cooperation.
Built on Strong Foundations of Cooperation
Close neighbours, India and Nepal share unique ties of friendship and cooperation characterised by an open border and deep-rooted cultural links. The 1950 India-Nepal Treaty of Peace and Friendship forms the foundation for the special relations between the two nations. Defence cooperation also exists, with India assisting the Nepal Army in its modernisation.
Economic Synergy and Cultural Ties
As trade partners, India is the largest trading partner of Nepal, with significant investment from Indian firms. The two countries also share cultural ties, bonded by shared aspects of Hinduism and Buddhism. The Swami Vivekananda Centre for Indian Culture was established in Kathmandu to exhibit the best of Indian culture.
Humanitarian Initiatives
India has provided significant monetary aid to Nepal as part of rehabilitation efforts after the 2015 earthquake. This has further cemented the bond between the two nations.
Overcoming Challenges to Relations
While the relationship between India and Nepal has generally been positive, it was strained by a boundary dispute involving two segments: the Kalapani-Limpiyadhura-Lipulekh area and the Susta area. The dispute intensified when India inaugurated a road near the China border, which Nepal regarded as a violation of its sovereignty. Additionally, the growing influence of China in Nepal through economic engagements has raised concerns for India regarding its strategic interests in the region.
The Way Forward
To overcome these challenges, India and Nepal must emphasise on digital connectivity initiatives and actively seek strategic partnerships on varied platforms. By jointly addressing common challenges like climate change, disaster management, and regional security, both countries can counterbalance China’s influence and strengthen regional stability. Furthermore, organizing joint cultural events can influence public opinion positively, thus ensuring the continuity of their strong bilateral relationship.