Manjima Parassery writes that India and Nepal relations have been good for a very long time now. Both the countries share numerous amounts of vital resources which could benefit both. The sharing of rivers has created and opportunity for both the countries to enter into bilateral agreements for better cooperation. Nepal is a country which has a lot of internal problems within itself such as political instability leading to very poor implementation of various developmental programs along with it there are economical downsides that the nation faces as the only consistent economic activity is the tourism the country receives. Adding to these problems are the lack of technological assets that is needed to help in the development of the economy. India has been having various collaborations with Nepal regarding the same.
On June 1, 2023, National Hydroelectric power corporation private limited (NHPC), India and Vidhyut Utpadan Company Limited (VUCL) Nepal signed a MOU for the development of the Phukot Karnali Hydroelectric Project in Nepal in the presence of both the Prime Ministers.[i] The project is a part of the India-Nepal Joint Vision Stateent on Power Sector Cooperation that was a joint statement issued by Prime Minister Sher Bahadur Deuba and Indian Prime Minister Narendra Modi. The Nepal prime minister has appreciated India’s cross border electricity trade regulation that has paved way for various countries like Nepal to gain access to India’s trade and power market. Indian participation of capacity building and direct support to infrastructure projects related to power generation and transmission.[ii]
Such collaborations benefit both the countries in diverse domains. According to the climate and environment commitments and policies undertaken by the respective governments, hydroelectric projects and power is a cornerstone in fulfilling these commitments.[iii] The Indian investment in Nepal projects will lead to generation of employment opportunities, help in strengthening their economies. Such Indian involvement will enhance the export revenue that India receives which further encourage more investment and developmental and financial opportunities. This might also help India develop new technology and improve the existing ones and implement similar ideas in India as well to produce renewable energy.[iv]
With the development in the Indian economy, the rules for trading are getting rigid and formal which has led to Nepal having issues in trading with India (Nepal’s largest trading partner) as it become difficult to move the cash around and make payments. Nepal finds it easier to do business with China rather than India with the prevention of family trading across the border and such similar rules. The story of growing Chinese investment fueled the Indian investment in Nepal as a reaction to the same. They focused on government-to-government trading and this trading within themselves gave the small businesses from China to directly connect to the people and the local market and thus leading to a formation of new economic network with between people of both the countries. India’s relation with Nepal is broader than just border agreements, it works for a lot of people in Nepal. The political class and its influence in Nepal divert the benefits of India’s work there only to areas and people having political connect. Nepal India border very lightly policed and very porous which is taken for advantage by groups which are an internal threat to India.[v]
Though there are challenges to the relation of these two countries, with both countries efforts relations can be improved. India should build more people-to-people relations and not just political but at the same time it should also refrain from interfering their internal issues. The bilateral Investment promotion and protection agreement signed by both countries need to see more efforts from Nepal and to show Indian investors that they are welcome. With China providing the results Nepal expects from India, we need to stay true to the promises we make. Ambassadors should not have any personal relations with Nepal as that can impact their ability to see through the correct lens.
Meetings held by both the countries help in strengthening the long-standing ties. Nepal is one the most important nation in India’s ‘Neighbourhood First’ policy and having good ties with Nepal will benefit both the countries. We are hoping for such projects to correct the mistakes made by both the countries in the past and enhance, improve the relations amongst India and Nepal.[vi]
Author: Manjima Parassery, Research Intern, CS3, USI.
Endnotes
[i] “NHPC and VUCL, Nepal sign MoU for development of Phukot Karnali Hydro Electric Project (480MW) in Nepal,” Press Information Bureau , accessed on 4 June 2023, https://pib.gov.in/PressReleasePage.aspx?PRID=1929103
[ii] “India-Nepal Joint Vision Statement on Power Sector Cooperation,” Ministry of Energy, water resources an irrigation( Nepal),Accessed on 4 June 2023, https://www.moewri.gov.np/pages/notices?lan=en&id=402; “NHPC inks initial pact with Nepalese utility to develop 480 MW Phukot Karnali hydro project,”The Economic Times, accessed on 4 June 2023, https://economictimes.indiatimes.com/industry/energy/power/nhpc-inks-initial-pact-with-nepalese-utility-to-develop-480-mw-phukot-karnali-hydro-project/articleshow/100682093.cms
[iii] “Strengthening India-Nepal Cooperation, ”Dhrishti IAS, accessed on 6 June 2023, https://www.drishtiias.com/daily-updates/daily-news-analysis/strengthening-india-nepal-cooperation
[iv] “India, Nepal satisfied with strides in power sector cooperation: MEA,” The Business Standard , last modified on 3 June 2023, https://www.business-standard.com/world-news/india-nepal-satisfied-with-strides-in-power-sector-cooperation-mea-123060300045_1.html
[v] “The challenges facing India-Nepal ties,” Observer research Foundation, accessed on 10 June 2023, https://www.orfonline.org/expert-speak/the-challenges-facing-india-nepal-ties-69458/
[vi] “Harnessing the Potential of India-Nepal Partnerships in Hydropower,” Observer Research Foundation ,accessed on 10 June 2023, https://www.orfonline.org/research/harnessing-the-potential-of-india-nepal-partnerships-in-hydropower/
Super project…gave me the knowledge to build a hydroelectric plant by myself…very helpful