Path to rapprochement

Prime Minister Pushpa Kamal Dahal has claimed that his recent India visit made progress on some key bilateral issues.  For the first time since the map row erupted between the two countries in 2019, Indian Prime Minister Narendra Modi acknowledged that boundary dispute in a press conference. This acknowledgement, according to Dahal, was an indication of a commitment from the political level to find a possible way out to settle the dispute. Every prime minister-level visit between Nepal and India provides an opportunity for a frank exchange of views and concerns. Prime Minister Dahal’s India visit was no exception. This time too, Dahal and his Indian counterpart Modi held candid discussions on all outstanding issues between the two countries. The Indian side said in a statement that the ‘two sides held productive discussions, which helped to widen the understanding perspective on a wide range of bilateral agendas and gave a robust direction to take the deep-rooted partnership forward.’ PM Dahal has said that candid and open discussion between two sides helped to build an environment of trust. The only concern for Nepal was that Prime Minister Dahal didn’t think about setting an institutional memory of his visit and meetings with the Indian side by choosing to discuss the bilateral issues in the absence of foreign minister or officials from the Ministry of Foreign Affairs. In some respects, the visit was different from the previous ones.

This time, bilateral talks were more focused on economic and development partnership, said former Nepali ambassador to India Lokraj Baral. "The visit has been largely successful because Modi has shown positive gestures on key issues, and unlike past visits, PM Dahal’s visit gave more importance to the development agenda which is a key foundation of bilateral issues," Baral said.

Political analyst Bishnu Dahal said India appears to have abandoned the policy of micromanagement in Nepal and is now focusing more on energy, water and other cooperation issues.  "The changing geopolitical situation may have prompted New Delhi to change the pattern of relationship with Nepal." One of the key outcomes of the visit was progress on energy cooperation. The two countries finalized an agreement for a long-term power trade, where India has pledged to import 1000 MW of electricity from Nepal within ten years. The two sides must sign a formal document on power trade as soon as possible and address other remaining issues related to export to India. India and Nepal have also signed memorandum of understanding (MoUs) on Lower Arun and Phukot-Karnali hydroelectric projects. Similarly, India has agreed to purchase 1200 MW of electricity, including 456 MW Upper Tamakoshi Hydropower Project. Similarly, two sides have reached an agreement on the constructions of transmission lines. Geopolitical analyst Bijaya Kanta Karna said the agreement on the power sector is vital because it has ended the long-standing uncertainty of the electricity market that Nepal produces. "India has agreed to buy the electricity which means more investment will come to Nepal in the hydropower sector," he said. Likewise, the two prime ministers also inaugurated some projects and oversaw the signing of several MoUs. Nepal and India also renewed the Transit Agreement which will allow Nepal to use inland waterways of India for the shipments of goods from third countries.  In 2019, India had agreed to provide three inland waterways, which has become a key component of the transit agreement. India has been providing more transit points after Nepal signed a transit agreement with China in 2016. According to Karna, the agreement on the transit is vital as it allows Nepal's own shipment from Kolkata port to the border. There have also been some positive discussions on exporting Nepali hydropower to Bangladesh via India, though many things are yet to be done. According to the Ministry of Foreign Affairs, India has decided to facilitate the first trilateral power transaction from Nepal to Bangladesh, through the Indian grid with an export of 40 MW electricity. There has to be trilateral talks for this power trade agreement to take shape. Pancheshwor Multipurpose Development Project was also one of the key agendas of Dahal’s India visit. The agreement to finalize the detailed project report (DPR) within the next three months and ensure financial arrangement within a year was a positive development. It must be noted though that there has always been positive talks at the political level. The hurdle lies at the bureaucratic level. Nepal has also requested for non-reciprocal access to its agricultural and primary products to the Indian market. To this end, the two prime ministers have directed for early convening of commerce-secretary level meeting to address the issues related to trade and to review the trade treaty. Similarly, the two countries agreed to push other economic and development partnership issues including the key connectivity projects. Three prominent talking points that used to be at the center of every prime minister’s visit — Eminent Persons’ Group (EPG) report, border dispute, and 1950 Peace and Friendship Treaty — didn’t find a prominent space during Dahal’s India visit. Probably, for the first time after 2016, the issue of EPG was skipped during bilateral meetings. Prime Minister Dahal later said that “he didn’t want to spoil the environment” by raising the EPG issue with the Indian side. So, it seems that the issue of the EPG and 1950 treaty is almost over. While the border issue did figure during the one-on-one meeting between Dahal and Modi, there was no official level talks. Another keenly watched issue was Prime Minister Dahal’s visit to Mahakaleshwar temple in Madhya Pradesh, highlighting the strong cultural ties between India and Nepal. Dahal, a Maoist leader who has never visited Hindu temple in Nepal and whose party targeted Sanskrit education during the insurgency era, offered prayers at the Mahakaleshwar temple. This out-of-character gesture from Prime Minister Dahal was significant, as Modi’s Bharatiya Janata Party (BJP) and its affiliate organization, Rashtriya Swayamsevak Sangh, have been urging Nepali leaders to take measures to protect the Hindu religion. BJP leaders are of the view that the Hindu religion in Nepal is being attacked in the disguise of secularism. But, Prime Minister Dahal defended his move by saying that he was not just a communist leader but the prime minister of Nepal, and his refusal to visit the temple could have hurt the sentiment of 1.4 billion people of India. Apart from bilateral ties, Nepal and India also discussed the ‘regional environment’ mainly focusing on China’s growing military, political and economic influence in the smaller countries, including Nepal. According to officials, the two sides discussed how China’s rise is affecting Nepal-India ties. Of late, China’s growing influence in Nepal has been a major concern for India.  Of late, Indian officials are prominently raising their security concerns in Nepal.  Overall, Dahal’s India visit was an indication that the bilateral relationship between Nepal and India is gradually heading towards normalization.  The economic and development partnership has gained momentum. Analyst Karna said the visit is a departure from past visits because of the agreement achieved in the areas of energy cooperation, connectivity and other development projects.  But many of the agreements have been reached at the prime minister’s level which needs to be finalized at the bureaucratic level. To do so, both sides should maintain and nurture an environment of trust. They must avoid possible irritants, especially at a time when the regional environment is very fragile, and could anytime spoil the bilateral relations.