India-Nepal Bilateral relations

Why in news: Nepal’s Prime Minister Pushpa Kamal Dahal Prachanda won the confidence vote, garnering the support of 157 out of 268 MPs present in the 275-member lower house of parliament.

Syllabus:

Preliminary Examination: Current events of national and international importance.

Main Examination: General Studies II: India and its neighborhood- relations.

• India and Nepal share an enduring partnership, strengthened by an extensive and open border spanning more than 1,850 kilometers across five Indian states: Sikkim, West Bengal, Bihar, Uttar Pradesh and Uttarakhand.

India-Nepal Bilateral relations

• The relationship is based on the historic India-Nepal Treaty of Peace and Friendship signed in 1950, which strengthens their mutual commitments and allows Nepali citizens to enjoy many of the same rights as Indian citizens, thereby fostering deep ties of kinship and cultural ties. Emotions are encouraged.
• This unique bilateral relationship is characterized by an extensive tradition of free movement of people between the two countries, facilitating closer mutual relations and economic integration.
• About 8 million Nepali citizens choose to live and work in India, benefiting from the opportunities and facilities available under the provisions of the treaty.
• This open exchange has created a rich image of shared heritage, leading to enhanced bilateral relations spanning diverse sectors including trade, security, energy and cultural exchanges.

High-level exchange

The high-level diplomatic exchanges between India and Nepal highlight the multifaceted and robust relationship that spans decades, encompassing state visits, participation in regional summits, and structured dialogue mechanisms aimed at bolstering cooperation and understanding.

Visits by Prime Minister Narendra Modi to Nepal:

• Initiated a bilateral dialogue with a visit from 3-4 August 2014.
• Participated in the 18th SAARC Summit in November 2014.
• Engaged in the 4th BIMSTEC Summit in Kathmandu in August 2018.

Visits by Nepalese Prime Ministers to India:

• Pushpa Kamal Dahal ‘Prachanda’ made two visits in 2016: a state visit on 15-18 September and participation in the 1st BRICS-BIMSTEC leaders’ summit on 15-17 October.
• K.P. Sharma Oli attended Prime Minister Modi’s swearing-in ceremony on 30-31 May 2019.

Presidential Visits:

• President Pranab Mukherjee’s historic state visit to Nepal from 2-4 November 2016 marked the first in 18 years.
• President Bidya Devi Bhandari’s state visit to India from 17-21 April 2017.

Bilateral Institutional Dialogue Mechanisms:

The India-Nepal Joint Commission, an essential platform co-chaired by the External Affairs Minister of India and the Foreign Minister of Nepal, convened for its fifth meeting on 21-22 August 2019 in Kathmandu.

Parliamentary Exchanges:

• A delegation from Nepal’s Parliamentary Committee for Development embarked on a study tour to India from 8-16 July 2016.
• Another delegation visited India from 20-31 August 2016.
• The International Relations and Labour Committee of Nepal’s Legislature-Parliament made a goodwill-cum-study visit to New Delhi and Gujarat from 5-12 March 2017.
• In May 2019, Nepal’s Federal Parliament established the ‘Nepal-India Parliamentary Friendship Group’, comprising members from both the House of Representatives and the National Assembly, reinforcing parliamentary diplomacy.

Bilateral Trade:

• In the fiscal year 2018-19, the total bilateral trade volume reached approximately INR 57,858 crores (US$ 8.27 billion).
• Nepal’s exports to India amounted to INR 3,558 crores (US$ 508 million), while imports from India stood at INR 54,300 crores (US$ 7.76 billion).
• Major Nepalese imports from India include petroleum products, motor vehicles and parts, steel billets, rice, machinery, medicines, electrical equipment, cement, agricultural tools, coal, and various food products.

Indian Investment in Nepal:

Indian firms represent a significant portion of foreign direct investment in Nepal, contributing to more than 30% of the total approved FDI.

Approximately 150 Indian ventures operate across diverse sectors in Nepal, including manufacturing, services (such as banking, insurance, dry ports, education, and telecommunications), power, and tourism.

Prominent Indian investors in Nepal encompass a wide range of companies such as ITC, Dabur India, Hindustan Unilever, VSNL, TCIL, MTNL, State Bank of India, Punjab National Bank, Life Insurance Corporation of India, Asian Paints, CONCOR, GMR India, IL&FS, Manipal Group, MIT Group Holdings, and Tata Power, among others.

India-Nepal defense cooperation

India-Nepal defense cooperation is multidimensional, including military training, disaster assistance, joint exercises, and welfare initiatives for Gorkha soldiers.

Military Modernization and Training:

• India supports the modernization efforts of the Nepal Army through equipment supply and training.
• Many soldiers of Nepal Army receive training in Indian Army institutes.
• The bilateral battalion-level military exercise, Surya Kiran, alternates between India and Nepal. The 14th iteration took place in Saljhandi, Nepal from 3–16 December 2019.
• Since 1950, India and Nepal have mutually conferred the honorary rank of General on each other’s army chiefs, symbolizing their strong military camaraderie.
• The Gorkha Regiment of the Indian Army comprises about 32,000 soldiers from Nepal.
• Welfare offices in Kathmandu, Pokhara, and Dharan, along with 22 District Sainik Boards in Nepal, oversee pension distribution and welfare programs for ex-Gorkha soldiers and their families.

2015 earthquake response:

• Following the 7.8 magnitude earthquake on 25 April 2015 and its subsequent aftershock on 12 May, India immediately sent the National Disaster Response Force (NDRF) and relief material to Nepal within six hours.
• Indian assistance included 16 NDRF teams, 39 Indian Air Force aircraft sorties, and 571 tonnes of relief material.
• India’s total relief assistance exceeded US$67 million, with a US$1 billion reconstruction package announced (comprising US$250 million in grants and US$750 million in concessional loans).

Reconstruction efforts:

• A memorandum of understanding (MoU) was signed in February 2016 to use a US$250 million grant to rebuild 50,000 private houses and restore sectors such as health, education and cultural heritage.
• In September 2016, a Line of Credit (LOC) agreement worth US$750 million was signed for reconstruction projects, which became operational in February 2017.

Connectivity and Development Partnership

• India has supported the upgrade of 10 roads in the Terai area and the development of cross-border rail links at Jogbani-Biratnagar and Jaynagar-Bardibas.
• Integrated Check Posts (ICPs) have been established at Birgunj, Biratnagar, Bhairahawa, and Nepalgunj with the Government of India’s assistance.
• India has extended Lines of Credit worth USD 1.65 billion for infrastructure development, including post-earthquake reconstruction projects.
• The Nepal-Bharat Maitri Pashupati Dharmashala in Kathmandu was inaugurated on 31 August 2018.

Water Resources Cooperation

• Many rivers flow from Nepal to India, contributing significantly to the Ganges river basin. These rivers are vital for irrigation and power generation in both countries.
• Established in 2008, a three-tier mechanism discusses water resources, flood management, inundation, and hydropower, enhancing cooperation in these critical areas.

Energy Cooperation

• Since 1971, India and Nepal have engaged in a Power Exchange Agreement to meet border area power needs through each other’s transmission infrastructure.
• Over twenty interconnections ranging from 132 kV, 33 kV, to 11 kV are utilized for power exchange and trade.

Cross-border Transmission Lines:

• The first high-capacity 400 kV Muzaffarpur-Dhalkebar line was completed in 2016 with a US$ 13.2 million GoI Line of Credit for the Nepal portion.
• Two additional 132 kV lines between Kataiya-Kusaha and Raxaul-Parwanipur, funded by GoI grants, were finished in 2017.
• India supplies approximately 600 MW of power to Nepal.
• The 2014 Electricity Trade Agreement facilitates cross-border electricity transmission, grid connectivity, and electricity trading.
• It sets out a framework for mutual electricity trade and establishes mechanisms for long-term cooperation, including a Joint Working Group (JWG), Joint Steering Committee (JSC), and Joint Technical Team (JTT) for planning up to 2035.
• South Asia’s first cross-border petroleum products pipeline from Motihari to Amlekhganj, built and financed by Indian Oil Corporation Limited, was inaugurated on 10 September 2019, marking an important milestone in energy cooperation.

Education

• Annually, India provides around 3,000 scholarships/seats for Nepalese nationals. These opportunities span Ph.D./Masters, Bachelors, and plus-two levels across various fields including engineering, medicine, and the arts.
• The scholarships encompass subjects such as engineering, medicine, agriculture, computer applications, business administration, music, and fine arts, both in India and Nepal.

Culture

• India actively promotes cultural exchanges through programs, symposia, and events, often in partnership with local bodies in Nepal, as well as Hindi conferences and seminars.
• Media and archeology training programs include familiarization tours to India for Nepalese journalists and training for media professionals and officials in areas such as archaeology.
• Cultural Agreements Several MoUs/Agreements have been signed to enhance cultural cooperation, covering areas ranging from literature and arts to youth affairs and city twinning.
• The Swami Vivekananda Centre for Indian Culture, established in Kathmandu in 2007, and the Nepal-Bharat Library, founded in 1951, serve as hubs for cultural exchange and education.
• B.P. Koirala India-Nepal Foundation was established in 1991 to promote educational, cultural and scientific cooperation, promoting mutual understanding through knowledge sharing.

Indian Community

• Approximately 600,000 Indians reside in Nepal, comprising long-term businessmen, professionals, and laborers.
• The Indian Citizens Association (ICA) of Nepal, formed on 14 September 1990, serves as a forum for the Indian community with branches in Pokhara, Damak and Bhairahawa.

Dispute Related to India –Nepal

Territorial Dispute: Kalapani and Susta Conundrum

Territorial disputes over Kalapani and Susta remain unresolved, both areas symbolizing the complexities of historical boundaries and modern nationalism. In response to such disputes, a diplomatic and sensitive approach based on international law and precedent, similar to the settlement process between India and Bangladesh on their territorial disputes, can offer a blueprint for peaceful negotiation and resolution.

Revisiting the 1950 Treaty of Peace and Friendship

The 1950 Treaty of Peace and Friendship, once the cornerstone of India-Nepal relations, is increasingly being seen as a relic of a bygone era, indicative of an unequal relationship. Amending this treaty to reflect contemporary realities and mutual interests can help redefine bilateral relations on a more equal footing. Joint statements over the years have hinted at this need, although progress has been intermittent.

Demonetization dilemma

India’s 2016 demonetization policy had unintended consequences for Nepal, leaving individuals and institutions with significant holdings of now devalued Indian currency. The issue has strained economic relations and highlighted the need for mechanisms to more effectively address cross-border economic policies and their impacts.

China’s growing influence

China’s growing presence in Nepal through investment, aid, and the Belt and Road Initiative represents a significant shift in regional dynamics. This requires India to reevaluate its approach towards Nepal, focusing on building stronger, multi-dimensional relationships that can provide compelling alternatives to Chinese influence, as well as Nepal’s right to diversify its partnerships. Can also respect.

Internal security concerns

India-Nepal’s open border poses challenges to internal security along with concerns over cross-border crime and terrorism. Both countries need to strengthen cooperation on security matters while ensuring respect for local communities and their livelihoods.

Human trafficking

Human trafficking remains a critical issue in Nepal, with estimates indicating that between 100,000 and 200,000 Nepalese in India may have been trafficked. The problem is notably severe concerning sex trafficking, both within Nepal and in India, where annually, between 5,000 and 10,000 women and girls are trafficked.

The extent of this crisis was spotlighted by CNN Freedom Project’s documentary “Nepal’s Stolen Children.” Since 1993, Maiti Nepal, a dedicated organization, has rescued over 12,000 Nepalese children from sex trafficking.

2015 Madhesi Crisis and Nepal Blockade

The adoption of a new constitution in Nepal in 2015 sparked significant unrest among several ethnic groups, including the Madhesis, certain Janajati communities, and some Tharu groups.

These groups felt marginalized and excluded from the political process and representation under the new constitutional framework.

In response, particularly the Madhesis initiated protests and blockades at key points along the India-Nepal border, notably near Biratnagar, in September 2015. This period of civil unrest closely followed a devastating earthquake that had primarily impacted the hilly regions of Nepal.

The Nepalese government raised allegations against India, accusing it of imposing a de facto blockade by restricting vehicle movement across the border, including at points where no protests were occurring, such as the borders adjacent to Sikkim, Gorkhaland, Uttarakhand, and Uttar Pradesh.

Nepal questioned the feasibility of such a comprehensive blockade given the historical and cultural ties among the people of the Nepalese hills, Gorkhaland, and the Nepali-speaking citizens of Sikkim.

The Indian government, on the other hand, categorically denied any involvement in the blockade. India also cautioned Nepal against stirring sentiments among the Nepali-speaking Sikkimese population and urged against labeling the Sikkimese as “oppressed people.”

Way forward:

• Encouraging quiet diplomacy and sensitivity to the concerns of each nation can pave the way for resolving territorial disputes.
• Increased people-to-people ties, bureaucratic cooperation, and political dialogue can foster deeper understanding and respect.
• Cooperation in energy trade, especially in areas such as hydropower, can serve mutual interests, reduce energy costs, and contribute to environmental sustainability.
• Removing investment barriers such as protectionist policies, and promoting a welcoming environment for foreign investment, especially from India, can boost economic growth and development in Nepal.

Conclusion

India-Nepal relations have gone through complex challenges and dynamics created by historical legacies, geopolitical changes, and evolving economic relations. At the heart of these challenges are territorial disputes, issues arising from treaties perceived to be outdated or imbalanced, economic considerations such as the impact of demonetization, the influence of external powers such as China, internal security concerns, and trust and ethnic differences.

Addressing these multidimensional issues requires nuanced, visionary strategies that respect the sovereignty, aspirations, and concerns of both countries.