Economics triumphs over politics: How Nepal PM Prachanda’s India visit proved to be a constructive one

The prime minister of Nepal Pushpa Kamal Dahal Prachanda’s first bilateral visit to India since assuming office in the current term should be hailed for bringing much needed warmth in bilateral ties, identifying priorities right and resetting a long-term framework of cooperation. Driven by the conventional warmth and cordiality, the wide-ranging discussions allowed the leaders of both sides to review the entire spectrum of the bilateral agenda between India and Nepal covering political, economic, trade, energy, security and developmental cooperation. Highlights of PM Prachanda’s India visit In the aftermath of the COVID-19 pandemic, a reassuring commitment for bilateral cooperation at multiple fronts will certainly be helpful in bringing the economic movements between two countries on expected lines besides facilitating a credible conclusion to a few long-pending matters like Pancheshwar Multipurpose Project (PMP), 1950 treaty and boundary. The Pancheshwar Development Authority (PDA) shall submit the finalised Detailed Project Report (DPR) to both Governments. The two Governments and their relevant entities shall take the lead in arranging finance for the PMP. The modalities of implementation shall be concluded within one year after approval of the DPR by the two Governments. In continuation of the Joint Vision Statement on Power Sector Cooperation of April 2022, the power sector cooperation was discussed at length for good, covering development of generation projects, power transmission, infrastructure and power trade. Both the prime ministers appreciated the growth in export of up to 452 MW of power from Nepal to India and the progress made in the construction of the 900 MW Arun-3 hydro-electric project in Nepal. Moreover, ushering a new dimension of cooperation in the power sector with giving the transmission passage (trilateral power transaction) from Nepal to Bangladesh through India is something path-breaking if Nepal ensures scale, efficiency and speed in generating and exporting power to both the Indian and Bangladesh markets. This will add up significantly to the prosperity of Nepal. Both sides made their commitment clear towards greater sub-regional cooperation, including in the energy sector, which would lead to increased inter-linkages between the economies for mutual benefit of all stakeholders. A notable development made through the visit is the finalisation of an agreement for Long-Term Power Trade wherein it was agreed to strive to increase the quantum of export of power from Nepal to India to 10,000 MW within a timeframe of ten years and towards this end take all necessary measures to encourage mutually-beneficial investments in Nepal’s hydropower generation sector and transmission infrastructure. The ground breaking of the 400KV Gorakhpur-Butwal transmission line, signing of the MoU for the development of 480 MW Phukot-Karnali project by National Hydroelectric Power Corporation (NHPC) and Vidhyut Utpadan Company Ltd (VUCL) Ltd, Nepal and the Project Development Agreement for the development of 669 MW Lower Arun between Satluj Jal Vidyut Nigam (SJVN), the Investment Board of Nepal (IBN) and to fund Bheri Corridor, Nijgadh-Inaruwa and Gandak Nepalgunj Transmission lines and associated substations under Indian Line of Credit at an estimated cost of US$ 679.8 million are other key highlights of Nepal PM Prachanda’s recent India visit. As the next step for further enhancing the Energy connectivity cooperation, both leaders also laid the foundation stone for the Phase-II of the Motihari-Amlekhgunj Pipeline in Chitwan. An MoU for construction of petroleum supply infrastructure by laying the new pipeline between Siliguri and Jhapa, and extending the existing oil pipeline from Amlekhgunj till Chitwan, as well as construction of two greenfield terminals at Chitwan and Jhapa, was also signed during the visit. Facilitated with an enabling scenario, the strong economic and trade partnership between the two countries should further flourish and that is something manifested as the signing of the revised Treaty of Transit took place during the visit that among others, provides Nepal an access to India’s inland waterways. The construction of the Tanakpur Link Canal was agreed with making a provision where water will be released from the Tanakpur Barrage to the irrigation command area of Nepal through this canal in a phase wise manner based on the readiness of the necessary facilities on the Nepali side. In the post pandemic times, especially when Nepal’s economy is passing through a recessionary phase confronting both structural flaws and cyclical decline, the development partnership should be given the required attention and implemented in a timely manner. Hopefully the latest round of bilateral discussions will help the ongoing and future projects, critically important for Nepal. Giving further fillip to connectivity through creation of Integrated Check Posts (ICPs) between India and Nepal being built under the Indian grant assistance in Rupaidiha (India) and Nepalgunj (Nepal) is a welcome development. ICPs in Sunauli (India) and Bhairahawa (Nepal) and another one in Dodhara Chandani in Nepal have been commenced too. These ICPs will help improve transportation facilities to further enhance people-to-people connectivity as well as trade, commercial and economic linkages between India and Nepal. In a major initiative towards enhancing Rail connectivity, both leaders presided over the inaugural run of the cross-border freight rail operations between Bathnaha (India) and Nepal Customs Yard (Nepal) on the Jogbani-Biratnagar rail link constructed with Indian grant assistance. This will further enhance trade and commercial linkages between both countries through Biratnagar, a major economic hub on the eastern side of Nepal. Further extending the Jaynagar-Kurtha passenger rail operations launched in April last year, the Kurtha-Bijalpura rail section was handed over to the Government of Nepal which will now be due for operationalization shortly. The Final Location Survey report of the Raxaul-Kathmandu rail link was also handed over to the Nepali side during the visit. The Government of India also agreed to the Government of Nepal’s requests for the training and capacity building of Nepali rail officials in the Indian Railway institutes and provision of one-time grant for maintenance of the railway infrastructure for Jaynagar-Kurtha rail section that was flagged off by the Prime Ministers of India and Nepal in April last year. Supported by the Government of India, two bridges will be built across the Mahakali River at Shirsha and Jhulaghat in Nepal connecting to Champawat and Pithoragarh districts in India under grant. These bridges will boost connectivity between the State of Uttarakhand in India and Sudurpaschim Province in Nepal. Setting up a fertiliser plant in Nepal with the participation of public and private sector entities from Nepal and India to meet the fertiliser needs of both Nepali and Indian farmers and with adequate assurance of market in both the countries, featured in the dialogue. A well-identified challenge that is ‘payment’ found the attention of leaders and two sides decided to further enhance digital financial connectivity between the two countries. In this regard, an MOU between National Payment Corporation of India Ltd (NPCIL) India and Nepal Clearing House Ltd (NCHL) for facilitating cross-border digital payments was exchanged. During the visit, the Indian side also offered to create a ground station and supply 300 user terminals to offer the services of South Asia Satellite to Nepal under grant assistance. This initiative would promote regional cooperation in the space sector, and space technology applications in the areas of telecommunication and broadcasting, tele-medicine, tele-education, e-governance, banking and ATM services, meteorological data transmission, disaster response and networking of academic and research institutions. In conclusion Within or beyond the political meanings, PM Prachanda’s India visit proved to be a constructive one. Back in Kathmandu, coming to terms with the positive momentum, he should lead through examples and give his leadership support to the joint projects and plans. It seldom happens when economics triumphs over politics, we have seen something of this sort recently and in New Delhi, the capital of world’s largest democracy. India and Nepal should continue working in unison, avail the shared prosperity and give a hope for subregional and regional cooperation in South Asia as well. The author is a policy professional, columnist and writer with a special focus on South Asia. Views are personal. Read all the  Latest News ,  Trending News ,  Cricket News ,  Bollywood News , India News  and  Entertainment News  here. Follow us on  Facebook,  Twitter and  Instagram.