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Nepal is seeing the first diplomatic visit of 2024 from India. Indian External Affairs Minister S Jaishankar is arriving in Kathmandu for a two-day visit on Jan 4.

Jaishankar will lead the Indian delegation in the 7th meeting of the Nepal-India Joint Commission—the highest bilateral mechanism between the two countries. The delegation will include Indian Foreign Secretary Vinay Mohan Kwatra, Anurag Srivastava, Nepal desk chief at the Indian External Affairs Ministry, and other high-level officials.

Among the key agendas of the meeting is the formal signing of the Power Purchase Agreement (PPA) which will pave the way for India to import 10,000 MW of hydropower from Nepal in 10 years, energy ministry officials say. The 11th meeting of the Nepal-India Joint Steering Committee in Chitwan will finalize the agreement. However, secretaries of both countries have yet to sign the agreement to formalize the long-term PPA.

The preliminary agreement for the long-term PPA was signed in June. It was endorsed by the Indian cabinet in September. Nepal had presented the draft of the long-term PPA to India during Prime Minister Pushpa Kamal Dahal’s visit to the southern neighbor from May 31 to June 3.

Pancheshwar in limbo

High-ranking government sources reveal that the upcoming diplomatic visit will not make progress on the Joint Detailed Study Report (DPR) of the Pancheshwar Multipurpose Project.

Despite being proposed nearly seven decades ago, the Pancheshwar project still remains confined to paper. A former Indian ambassador to Nepal expressed skepticism about the project, stating that neither country is genuinely committed to advancing the project. Despite being a recurring topic in high-level discussions, there is a lack of genuine commitment from Nepal and India to implement this mega project, he added.

An official from Nepal’s energy ministry echoed the sentiment. “The project won’t move forward without political commitment. The joint mechanism between the two countries cannot resolve the issue,” he added.

While the initial disagreements on the joint DPR of the project numbered over 500, most of them have been sorted out. The two sides reportedly have differences or just two or three issues now. Both nations have struggled to form a common stance on water use. “The project has been stalled because the countries are prioritizing self-interests over bilateral concerns regarding water usage,” the energy ministry official said.

India first identified the Pancheshwar Project on the Mahakali River, which serves as the border between the two countries, in 1956. The two countries decided to form a joint team to study the project in 1978. Nepal established the Pancheshwar Multipurpose Project Office in 1988. The 1991 Pancheshwar Multipurpose Project Report stated that 6,720 MW of hydropower can be generated - 6,480 MW by building a 315-meter rock-filled dam at Pancheshwar, and an additional 240 MW by building an 83-meter regulating dam at Rupaligad. Nepal prepared the Detailed Project Report (DPR) for the project in 1995 based on the findings and insights derived from the 1991 report.

Nepal and India signed the Mahakali Treaty for the integrated development of the Mahakali River, which included Sarada barrage, Tanakpur barrage and Pancheshwar Dam Project, on 12 Feb 1996.

In 2009, Nepal and India agreed to form the Pancheshwar Development Authority to implement the project. In 2014, WAPCOS Limited, a government undertaking of India, was assigned to prepare a joint DPR by studying separated DPR prepared by the two countries. WAPCOS submitted the DPR in 2016. However, differences arose between the two countries on the DPR as it reportedly contradicted the Mahakali Treaty signed by the two countries. An agreement was reached to finalize the DPR within three months during Dahal’s India visit. However, there has been no progress even though it has already been seven months since the agreement was reached. 

The project also aims to control floods in Kanchanpur district and irrigate 93,000 hectares in Kanchanpur and 1.6m hectares in India.

The Nepal Stock Exchange (NEPSE) gained 27.90 points to close at 2,058.00 points on Wednesday.

Similarly, the sensitive index surged by 3.76 points to close at 384. 29 points.

A total of 10,500,498-unit shares of 306 companies were traded for Rs 4. 04 billion.

Meanwhile, Dibyashwori Hydropower Ltd, NRN Infrastructure and Development Limited, Peoples Hydropower Company Limited, Bhagawati Hydropower Development Company Limited and Sonapur Minerals and Oil Limited were the top gainers today, with their price surging by 10. 00 percent.

Similarly, Laxmi Laghubitta Bittiya Sanstha Ltd was the top loser as its price fell by 5.10 percent.

At the end of the day, total market capitalization stood at Rs 3. 19 trillion.

The price of gold has dropped by Rs 200 per tola in the domestic market on Wednesday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow metal is being traded at Rs 120, 800 per tola today. It was traded at Rs 121, 000 per tola on Tuesday.

Meanwhile, tejabi gold is being traded at Rs 120, 200 per tola. It was traded at Rs 120, 400 per tola.

Similarly, the silver is being traded at Rs 1,455 per tola today.

The import of electric vehicles (EVs) is experiencing a significant surge in Nepal, thanks to the government’s duty waiver on the import of environmentally friendly vehicles.

Data recently released by the Department of Customs shows that a staggering 3,675 units of electric cars, jeeps, and vans made their way into the country in the first five months of the fiscal year 2023/24. This figure is nearly triple the imports recorded during the same period in the previous fiscal year, where 1,353 EVs were brought into the country.

The surge in EV imports reflects the growing popularity and acceptance of clean and green mobility options. The country imported EVs with a combined import value of Rs 9.29bn.

Out of total imports, 2,028 cars have the capacity below 50 kWh. The import value of these cars is Rs 5.81bn. Additionally, 52 units of cars with a capacity ranging from 51 kWh to 100 kWh entered the country during the review period. These cars cost a combined Rs 262.64m. Likewise, 11 units of cars with a capacity ranging from 201 to 300 kWh were imported into the country in the review period. The total import value of these cars is Rs 77m. 

While the import of passenger cars is increasing at a healthy rate, the rate of EV adoption in public transport is very low. According to the Department of Customs 134 units of microbuses with 11-14 seats with a total import value of Rs 414.4m were imported into the country during the review period. Likewise, 56 units of microbuses with 15-25 seats entered the country. The import volume of these microbuses is Rs 187.6m. The majority of these microbuses have been used in public transportation. 

The government formulated Environment-friendly Vehicle and Transport Policy in 2014 setting a target of increasing the number of EVs to 20 percent of total motor vehicles in the country by 2020. While the government missed this target, recent import data shows the automotive landscape in Nepal is undergoing a transformation. 

The passenger car segment is witnessing a significant growth. Nepal had 249 EV passenger cars in 2020/21, which has increased to 4,050 units in 2022/23. 

The government imposes a one percent customs duty, 13 percent VAT, and five percent road tax on EVs with a capacity of up to 50 kWh. Similarly, microbuses with 11-14 seats are subject to a 13 percent VAT, 10 percent customs duty, and seven percent road tax.