South Asia

Nepal, India Renew Transit Treaty, Sign Deals in Energy, Connectivity

The two prime ministers also discussed boundary issues. "I maintained that the border dispute should be resolved through the established diplomatic mechanism," said Nepali PM Dahal.

New Delhi: Nepal and India on Thursday, June 1, renewed the treaty on transit and agreed in principle to export Nepali electricity to Bangladesh after talks between the two prime ministers were held in New Delhi.

During the talks, the boundary issue was also discussed.

Nepali Prime Minister Pushpa Kamal Dahal was on his first foreign visit to India after taking over the post in his third term as premier of the Himalayan Republic. Along with an 80-member delegation, he was accompanied by his youngest daughter, Ganga Dahal, who is projected as his political heir.

Following the talks, the two leaders virtually inaugurated six connectivity projects, which included the development of integrated check posts, rail lines and power transmission projects.

Seven agreements were signed in the presence of the prime ministers, which included the key transit treaty that had expired in 2019. The amended treaty will allow Nepal to access India’s inland waterways for cargo transportation to sea ports.

“In this, along with new rail routes for the people of Nepal, a provision has also been made for the facility of India’s inland waterways,” said Prime Minister Narendra Modi in his press statement.

Prime Minister Dahal noted that the two leaders had also directed their commerce secretaries to direct the initiation of the process to review the trade treaty.

He also revealed that India has been asked to give non-reciprocal market access with more “flexible and easy quarantine procedures” for Nepal’s agricultural products, as well as, simplified Rules of Origin for other products. Besides, India was also asked to remove anti-dumping duty on Nepali jute products.

Other projects

Describing hydropower projects as “one of the most important elements of our economic partnership”, Dahal thanked Modi for agreeing to facilitate the export of hydropower from Nepal to Bangladesh through India.

“We have agreed that export of up to 50 megawatt (MW) of power from Nepal to Bangladesh via India would commence soon and the three countries would work out an agreement to this effect soon,” he said.

Currently, India exports around 452 MW of power from Nepal. Dahal added that India had agreed to import an additional 1,200 MW.

“Looking ahead, an agreement on the long-term power trade has been completed. Under this agreement, India will import 10,000 MW of power from Nepal in the next 10 years. This is a major development in enhancing cooperation in this area based on the Joint Vision Statement that the two prime ministers issued in April 2022,” he said.

A significant deadline of just three months for finishing the Detailed Project Report (DPR) of the Pancheshwar Multipurpose Project was announced by Dahal. The Pancheshwar project has been hanging fire for 27 years since the signing of the Mahakali treaty, but it remained mired in dispute at the DPR stage itself.

On connectivity, Dahal said that India has given “positive indication” for additional air entry routes. “We request for the approval of a high-altitude additional air-entry route from Mahendranagar at an early date. We appreciate India’s approval for near-border flight operation in the Gautam Buddha international Airport in Bhairahawa, Nepal through publishing ILS procedure in the AIP to enhance safety and efficiency of flight operation,” he said.

The Nepal premier added that Kathmandu would like to have regular flights from Nepal’s newly built international airports of Bhairahawa and Pokhara to and from various cities of India.

The boundary issue

While economic issues dominated the agenda, the boundary issue also figured in the talks. Relations between India and Nepal had dipped substantially in the last nine years over two main issues – purported Madheshi discrimination in Nepal’s constitution and institutionalisation of territorial claims by Kathmandu.

At the media event, Dahal said that they decided that the boundary issues will be discussed through established channels. “Prime Minister Modi and I discussed border issues. I maintained that the border dispute should be resolved through the established diplomatic mechanism,” he said.

Modi also mentioned the resolution of border issues. “We will continue to work to take our relationship to the heights of the Himalayas. With this spirit, we will solve border-related or other issues as well.”

While the boundary issue seemed to have received some attention, there was no further talk about the unpublished report of the Eminent Persons Group and the Agnipath scheme.

The EPG report on recommendations to the 1950 bilateral treaty of peace and friendship has been largely shelved, due to India’s concerns about its provisions. The Indian army’s Agnipath scheme has largely brought a stop to the recruitment of Nepali gorkhas.

“To the best of my understanding, these issues were not raised during the restrictive-level and delegation-level talks,” the Indian foreign secretary Vinay Mohan Kwatra told reporters.

However, he didn’t answer whether the Nepali side had raised any concern about a mural in the new parliament building which depicted ‘akhand bharat’, since Nepali opposition leaders had objected to it.