Connectivity and cooperation: Adding new dimensions to India-Nepal ties

In a bid to bring the focus back on regional and subregional cooperation in South Asia, a dysfunctional institutional experiment like South Asian Association for Regional Cooperation (SAARC), has been hindering any real action in recent years. Consequently, merely the positive spirit (sans working institutional framework) in favour of an important unit called ‘South Asia’ couldn’t do much in substantial terms. Against the backdrop, a fresh line of thinking was much needed. Here, giving a fillip to Highly Facilitated Trade Corridor (HFTC) focusing on the utmost crucial corridors connecting member-countries in the Bangladesh, Bhutan, India and Nepal (BBIN) initiative and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) sub-regions comprising five member-countries deriving from South Asia (Bangladesh, Bhutan, India, Nepal and Sri Lanka) would certainly strengthen the regional integration besides constructively influencing the growth of regional integration objective across the region. Edited by Constantino Xavier and Amitendu Palit, the policy brief of Centre for Social Economic Progress (CSEP) “Connectivity and Cooperation in the Bay of Bengal Region” makes a strong pitch for HFTC (Paper: Conceptualising Highly Facilitated Trade Corridors in Southern Asia by Pritam Banerjee, Senior Consultant, Asian Development Bank) in South Asia. An idea of HFTC is a sort of cure with a combination of initiatives to address the major bottlenecks facing the border transport, trade and operations with a broad aim to achieve an effective regulatory collaboration. An integrated approach adopted by India for developing the transport infrastructure has consequential bearing to various economic and industrial corridors beyond boundaries too, most significantly in the context of Nepal, a friendly neighbour that has its highest trade exposure with India. The conceptualisation of HFTC helps in having a clearer implementation framework at place with keeping an agenda of synergising India’s increased thrust on integrated infrastructure development with broadening its ambit by aligning to cross-border regional connectivity and regional economic integration goals. CSEP policy brief underlines how an important aspect of achieving such synergy would be to develop a holistic framework for agencies of the countries in the corridors to work together and address the physical and regulatory impediments that disturbs the smooth movements of goods across borders. India’s bilateral ties with Nepal should be driven with empathy, trust and complementarity, and for that matter, the smoother trade facilitation will surely add great value to the cooperation mechanism between two countries. In plain-speaking, the trade and transport facilitation between India and Nepal should meet the objectives of efficient transit and transport of goods traded between these two countries. Some structural changes are needed, especially by removing key trade-related infrastructure constraints within Nepal and near the Indian borders (both sides). On this front, going forward with the progressive measures, will result in reducing transport time and logistics costs for Nepal’s international trade. For a landlocked country with heavy reliance on India for seaports connectivity (Kolkata and Visakhapatnam), Nepal should urgently take initiatives in this direction and also reciprocate with positive operational action on India’s strides for infrastructural overhaul near the Nepal borders including with Integrated Check Posts (ICPs), improved railway and road networks. There is a glaring urgency to modernise transport and transit agreements between India and Nepal as per the changing fundamentals, aspirations and needs. To expect the positive action at this front, a lot will depend on how Nepal shows the willingness to augment its trade-related institutional capacity and recalibrate its industrial capacity. This becomes particularly a significant point when the scary news about the growing disenchantment of Nepal’s leading industrial groups and their urge to look beyond boundaries for routing their capital earned in Nepal gets prominent slots in leading broadsheets. With the declining propensity of the government to spend in Nepal, the Nepali economy is gripped with adverseness at both business and sentimental fronts. So, a difficult year is ahead for Nepal as its businesses are facing severe challenges with liquidity crunch and cyclical fluctuations in demand with falling sustained income of masses in post-pandemic times. A high inflationary tendency that is almost a permanent feature of Nepali economy hammers on the consumption side besides jeopardising the savings. Such tendencies are the direct or indirect outcomes of prolonged and forgiven ailing policies and practices, as Nepal’s failure has been its inability to adopt the best of socialism or capitalism. In fact, it couldn’t get on a middle path where the possible option would have to embrace economic reforms in ‘letter and spirit’ for good reasons. To overcome the challenges, Nepal should reassess its priorities on the connectivity front. In recent years, its Chinese hangover resulting from mixing electoral compulsions (vote bank politics) to infrastructural drive has caused unbearable damages. The examples are many long-pending road projects (managed by Chinese contractors) and Pokhara Airport that China continues to put under its massive territorially expansionist Belt and Road Initiative (BRI) despite experimental resistance by the parties in power at different points of time. This can make even an incorrigible optimist jittery. At this crucial point of time, when Nepal is temporarily half-shut with yearly eventful time from Dashain (Durga Puja) to Tihar (Diwali), the pressing economic issues are not something that should be ideally kept on the backburner. Be it exodus, high inflation, imperfectly competitive market with undeclared cartelling, rampant corruption and endemic economic woes, they all keep close bearings with Nepal’s landlocked status and its inability to usher to reform some of its key self-defeating trade norms. While the festivities should be enjoyed, it should not make its Central Bank (Nepal Rastra Bank) so joyous to print new currency every year for following a custom and without weighing its implications. What forgotten Nepalis (destined migrants) need most is to reclaim their right to live in Nepal with dignified livelihood options, rather than visiting their homeland with return tickets. In good and testing times, India and Nepal have to cooperate at multiple fronts. No side should negate the fact that such a bilateral term is trust-based and both at the government and people levels, India and Nepal are uniquely positioned to accelerate the economic activities with increased thrust on improving connectivity. In an enabling role, the joint action should be taken to have a long-term view on the infrastructure and trade facilitation drive. The deeper engagements at these fronts and with continuing India-Nepal development partnership, the positive momentums can be expected. Moreover, progressive policies and action will help in giving a much needed traction to the economy, letting the system work in favour of all Nepalis. The author is a policy professional, columnist and writer with a special focus on South Asia. Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect Firstpost_’s views._ Read all the  Latest News,  Trending News,  Cricket News,  Bollywood News, India News and  Entertainment News here. Follow us on  Facebook,  Twitter and  Instagram.