As expected, Indian Prime Minister Narendra Modi’s visit to Nepal brought to the fore the bitterness in Nepal-India relations and also between the Hills and the Madhes. Nonetheless, there is much to be said about an Indian Prime Minister visiting Nepal three times in quick succession in a context where there had been no official visits from India to Nepal for over two decades before Modi’s tenure. And without improv­ing economic ties and establishing mutual respect with India, it is vir­tually impossible for Nepal to even begin to flourish. Though Modi did not publicly apologize for the block­ade, which most Nepalis wanted, there was tact in his demeanor this time that said in no unquiet terms that he knows what he had done.

 

With the blockade over two years behind us, Modi’s visit did open up the avenue for a new and redefined relationship with India, albeit per­haps not as revolutionarily redefined as some of us might have hoped.

 

Changing narrative

 

If we go back to 3 August 2014, and remember Modi’s address to Nepal’s then-Constituent Assem­bly, the change in his language and narrative to accommodate the cur­rent political realities of a UML-led government is quite apparent. In fact, the way in which politics was dealt with this time was seemingly not to deal with it at all; all atten­tion was shifted to the political rel­evance of the religious purpose of Modi’s visit.

 

It was quite apparent that elec­tions in India had driven Modi’s “pil­grimage” to Nepal. Nonetheless, for our political actors, some space was created to engage with India about its promises to deliver on develop­ment programs in Nepal.

 

Addressing Parliament on May 13, PM Oli shared an overview of Modi’s visit, and although little can be known about the intentions to realize any of the plans, Oli had thought through what he was look­ing to achieve from Modi’s visit. PM Oli however did not receive the public applaud he had hoped for his attempts to redefine relations with India, for example, by not going to welcome Modi himself at the airport or accompanying him everywhere. In fact, Modi’s visit and the way the Nepali state handled it have elicited mixed responses.

 

In particular, it was odd to see that in Janakpur, the provincial government played an integral role in engaging with the Indian Prime Minister on his visit to the Janaki temple, whereas on his visit to Muktinath, the provincial gov­ernment was nowhere to be seen. There were other anomalies that were also brought up on social media platforms, for example, the government’s decision to host the program at Rastriya Sabha Griha primarily in English and secondarily in Nepali, raising concerns over the relevance to do so.

 

Trade deficit

 

Toward the end of Modi’s trip, the Nepal-India joint statement released on 12 May has set a September 2018 deadline to outline a clear imple­mentation plan for bilateral agree­ments. To understand the gravity of the agreements’ implementation, let’s take one agreement as an exam­ple: The two prime ministers have agreed to review the considerable trade deficit between the two coun­tries and find ways to address it.

 

Our trade dependency with India is high. Whereas 64 percent of our total import comes from India, only 12 percent comes from China. Similarly, 66 percent of our total export goes to India while only 3 percent goes to China. According to the Trade and Export Promo­tion Center (TEPC), Nepal’s trade deficit in 2017 was around Rs 500 billion; we imported goods worth around Rs 540-550 billion whereas we exported goods worth only Rs 30-40 billion.

 

Furthermore, in the last decade, the average growth in export is 4.2 percent whereas the average growth in import is 18.2 percent. Our current Finance Minister has been relentlessly going on about how without increasing investment and production in the country, there is no way to address the trade deficit with India.

 

In sum, if tangible methods to decrease the trade deficit with India are implemented jointly by the two governments, Nepal will gain much in terms of economic growth. But it’s very clear it will require more than lip service on the part of both the Indian state and our own leaders.

 

The agreement on addressing the trade deficit is just one of the many others that were reached, which if sincerely implemented, could pro­foundly impact Nepal’s everyday reality. Arun III hydroelectric proj­ect, which ironically was obstructed by the UML for over a decade, has been inaugurated.

 

There have been agreements on more air routes, more cross-bor­der routes, the Ramayana circuit etc. which have the potential for tremendous positive impact. But it ultimately boils down to the will and resources on the part of both actors to bring the agreements to fruition. PM Oli may well try to pressurize India to act, and act fast, for his visit to China has also just been con­firmed for June. Stay tuned.