PM Modi's Nepal Visit-Understanding the Economic and Strategic Aspects

India-Nepal Ties

India and Nepal established diplomatic relations in 1947 with an unrelenting commitment to the principles of peaceful coexistence, equality, sovereignty, territorial integrity, and respecting each other’s national interests [1]. Both countries cherish the intimate bonding they share in matters of history, culture, customs, traditions, religion, and so on. Moreover, there is a long-standing tradition of an open border between them facilitating the free movement of people. This distinctive feature strengthens the age-old connection between them and ensures it continues for years to come. The cooperation is further bound through the framework of the India-Nepal Treaty of Peace and Friendship signed in 1950. Both the countries promised neither government shall tolerate any threat to the security of the other by a foreign power and share information concerning misunderstandings with any neighboring state which can cause friction in their bilateral relations. The treaty granted equal treatment in terms of economic and educational opportunities to Nepalese citizens as to Indian nationals in India, hence benefitting around 8 million Nepalese citizens who are living and working in India. It also accounts for preferential treatment to Indian citizens and businesses in Nepal.

There have been numerous high-level political visits cementing their bilateral relations. On different occasions, key leaders from both sides have undertaken a state visit. Before the Indian Prime Minister's Nepal tour last month, the Nepalese Prime Minister made his maiden visit to India in April after coming into office in July 2021 [2]. Bilateral talks were held between both parties on myriad topics with a special focus on the boundary issue. Interactions and deliberations constitute the hallmark of Indo-Nepal relations. These state visits promote goodwill, trust, understanding, and cooperation and lay out future possibilities.

Their friendship has gone through several challenges. For instance, the 2015 unilateral blockade after the dissatisfaction expressed by India over Nepal’s new constitution back then. This resulted in widespread resentment against India. The movement of goods was halted for months and the border remain shut for a very long time leaving Nepalese citizens in economic distress. India is a crucial trade partner of Nepal. The latter being a land-locked country, India has provided a transit facility to Nepal for third-country trade. Moreover, India plays an important role in extending assistance primarily in areas of infrastructure development and human capital. The economic aid from India has improved manifold since the restoration of democracy in Nepal in 1990 with massive public and private investment in the country.

The countries became distant due to the Limpiyadhura-Lipulekh border issue and the relations reached the lowest during that time. The boundary in this region is based on the Treaty of Sugauli ratified in 1816 between the Gurkha rulers of Kathmandu and the East India Company. The boundary is determined on basis of the river Kali. The entire dispute is because of the different interpretations of the origin of the river. Kalapani regions were incorporated into the map of India and a road to Mansarovar via Kalapani was inaugurated which was strongly condemned by Nepal. A revised official map was published earlier including the territory from the Limpiyadhura source of the river Kali. Engagement between the countries has to be more proactive and both sides are required to be sensitive to each other's claims to overcome friction.

Another major challenge is the expanding Chinese influence in Nepal. China has always considered Nepal a principal element in its South Asian footprint. Further, Nepal is also an important partner in China’s Belt and Road Initiative. China has become one of the largest sources of FDI in Nepal, have signed various agreements on trade and transit, bestowed military grant, and engaged itself in many developmental projects.

Key Takeaways

India was successful in rebuilding the lost connection with a carefully selected location and time for Modi’s fifth visit to Nepal. The Indian government harmlessly conveyed that they praise the shared culture between the countries more than the monetary aid China has been providing so generously. A day-long visit indicated the ever-strengthening friendship between India and Nepal and the plausible advantages of this bond in the coming years. While culminating his journey Modi stated, “The visit is intended to celebrate and further deepen the time-honored linkages that have been fostered through centuries and recorded in our long history of intermingling” [3].

a)    The foundation laying ceremony for the construction of an international center for Buddhist Culture and Heritage within the Lumbini Monastic Zone will enhance cultural and religious ties and maintain fondness and admiration of Lord Buddha. The move will rectify the missed opportunity by India based on the shared Buddhist heritage.

b)    The Modi government time and again has adopted a religious motif to augment the bilateral relations with Nepal. In the earlier visits to the country, the Prime Minister offered prayers at many Hindu sacred shrines. The religious-cultural diplomacy plays a key role in raising the standards of the current state of Indo-Nepal relations.

c)     India is upholding its soft power technique to mend ties with Nepal. An announcement of a joint India-Nepal plans to give Lumbini its rightful place in the Buddhist circuit (covering all the main pilgrimage centers for Buddhism) was made.

d)    In entirety, six MoUs were signed during the visit consolidating the cultural, technological, and educational links [4].

e)    Talks were held to speed up the lagging infrastructure projects in Nepal. The relationship has faced stumbling blocks in the past due to India’s inability to complete developmental projects in time compared to its adversary, China. Times have changed, Nepal's Prime Minister invited India to undertake the stranded West Seti hydropower project which was in hands of Australia earlier but soon abandoned. Additionally, Satluj Jal Vidyut Nigam Ltd in India signed an agreement with the Nepal Electricity Authority to develop and execute the proper functioning of the Arun IV hydropower project.

f)      In the field of education, a proposition was made to establish collaboration between Madras IIT and Kathmandu University for a joint degree program. Another venture between the Indian Council of Cultural Relations and Lumbini Buddhist University for the formation of a Dr. Ambedkar Chair for Buddhist Studies.

In a nutshell, the short visit by Modi will refurbish the Indo-Nepal relations in the longer run. It has resolved Nepal's concerns about growing aloofness toward India. Further, Modi's reassurance of Lumbini being the birthplace of Lord Buddha has put an end to one of the major fallout between India and Nepal [5]. Presently, India hankers to further its 'Neighbourhood First Policy' and work towards the rejuvenation of ties with its Himalayan neighbor. India is highly dissatisfied with increasing China's infrastructural activities in Nepal and its extensive presence in the Terai region of Nepal which is in close proximity to the Indian border. The day Modi visited Lumbini, Prime Minister Deuba inaugurated Gautam Buddha International Airport in Bhairahawa near Lumbini, the second international airport in the country built with assistance from China. Therefore, the visit from India not only holds religious significance but a strategic one too. Conversations between the two countries were quite comprehensive enveloping the entire domain of developmental partnership.

Future Prospects

India and Nepal have deep-rooted historical, cultural, ethnical, and social relations. Both countries have a majority of Hindu population which binds the people with a common cause. The relations have been distinct based on two critical pillars, an open border system and people-to-people contacts of kinship. There is not only political, social, and economic interdependence but the existence of familial and marital ties [6]. In short, the leaders of the two countries very well understand their strategic interests in South Asia as well as the age-old ‘roti-beti’ relationship. Although many issues were not given adequate attention during the recent visit including the land border confrontation, facilitation of electricity exports, and the unresolved debates around the 1996 Mahakali treaty. However, experts suggest that the visit would open new dimensions of cooperation and coordination, and further, absolve the major irritants in the relations.

References

[1] https://mofa.gov.np/nepal-india-relations/#:~:text=Nepal%20and%20India%20enjoy%20excellent,economic%20engagements%20with%20each%20other.

[2] https://thediplomat.com/2022/05/what-lies-behind-modis-nepal-visit/

[3] https://www.business-standard.com/article/economy-policy/pm-modi-signs-6-mous-with-his-nepalese-counterpart-deuba-in-lumbini-122051600682_1.html

[4] https://indianexpress.com/article/opinion/editorials/pm-modis-recent-nepal-visit-saw-a-successful-deployment-of-indias-soft-power-to-repair-bilateral-ties-that-were-under-stress-7924512/

[5] https://www.tribuneindia.com/news/comment/india-nepal-ties-set-for-an-upward-swing-397441

[6] https://www.orfonline.org/expert-speak/reset-india-nepal-relations/

Pic Courtesy-Raimond Klavins at unsplash.com

(The views expressed are of the author and do not represent views of CESCUBE.)