India to study feasibility of rail track through Terai.
In a bid to make Nepal’s transition from a monarchy to a federal republic as easy as possible, India has agreed to Nepal’s request to “review, adjust and update” the 1950 Treaty of Peace and Friendship.
In a joint statement issued after the visit of Nepalese Prime Minister Pushpa Kamal Dahal ‘Prachanda’ on his first political visit abroad, New Delhi and Kathmandu agreed to set up a committee headed by the two foreign secretaries to study the treaty.
Nepal has time and again charged that the treaty is weighed in India’s favour and curtails Nepal’s sovereignty. Under the terms of the treaty, while the Nepalese are allowed to own property, seek jobs and set up business in India, no such reciprocal measures are available to Indians. However, Nepal has to inform India in advance if it wants to purchase an armament system and pledges to be guided by India in its foreign policy.
At least three attempts have been made in the past to renegotiate the 1950 treaty, which Nepal sees as a relic of its monarchical past.
During the Nepali Congress regime, when Foreign Minister Chakra Bastola invited opinion from all political parties on the changes that could be made to make the treaty more equitable, not a single party replied. Before that, when Pashupati Shamsher Jung Bahadur Rana was foreign minister and a demand was made to renegotiate the treaty, his response was: “Let sleeping dogs lie”. The last time this exercise was mounted was when the Communist Party of Nepal was in power and its PM, Madhav Nepal, had come to India to moot changes in the treaty.
Today’s joint statement also announced that the Nepalese government would encourage investments from India’s public and private sectors. Behind this was the suggestion made by Nepali businessmen that India help that country set up four Special Economic Zones (SEZs) along the lines of similar ones in India.
The statement also referred to joint steps to prevent cross-border crimes. Nepal renewed its pledge to ensure no activity inimical to India’s interests took place on its soil, a veiled reference to Pakistan-sponsored terrorist training camps or any such activity. Home secretaries of the two countries are to meet shortly to implement these decisions.
The commerce secretaries of the two countries will meet to review existing trade and transit arrangements to promote industrialisation in Nepal and expand bilateral trade on a sustainable basis.
Infrastructure development, including road, rail and hydel projects, will be undertaken by India in Nepal. India has agreed to implement the Naumure Hydro-electric Project on the Rapti river and will also study the feasibility of a railway track through Nepal’s Terai area, something the Nepalese PM had suggested during the trip.
India also lifted the ban on export of rice, wheat, maize, sugar and sucrose for quantities agreed with Nepal.
Credit of up to Rs 150 crore will be offered to the Nepalese government for the next three months to ensure uninterrupted petroleum supplies to the country.
All these measures are designed to chip away at the Maoist hardliners’ economic vision for Nepal, which is finding an alternative to economic dependence on India.
In his earlier economic plan, Finance Minister Bhattarai had argued that overdependence on India had stunted Nepal’s economic growth, highlighting the open border as a major culprit.
The proponents of the ‘Look Beyond India’ line have warned of the threat of an economic blockade, citing 1989 when the Trade and Transit Treaty was allowed to lapse and for good reasons at the time, India closed all but two of the 17 border transit points. Nepal was forced to import its essential supplies from Singapore, Thailand and China at a high political and economic cost.
The large-scale damage caused by the Kosi floods was also discussed. Immediate relief of Rs 20 crore has been sanctioned for Nepal. The two sides also discussed how the embankment on the Gandak could be strengthened as a preventive measure.
