Nepal, India: Easy or Uneasy Partners
Even small families develop misunderstandings so it is but natural to expect that apprehension will definitely occur when the relations between two countries are concerned. Therefore the important issue is not whether disputes arise or not; the important issue is how swiftly and effectively these issues and irritants are addressed.
Shanker Man Singh
MBA, PGDIM (Delhi School of Economics), TIS ( Bangkok), SEC ( USA)
India has named Vinay Mohan Kwatra, currently its ambassador to France, as its new envoy to Nepal. According to reliable sources, the Indian Ministry of External Affairs (MoFA) recently wrote to the Ministry of Foreign Affairs in this connection. It is learnt that the new Indian envoy will be arriving in Kathmandu to take up his new diplomatic assignment in February. Kwatra is replacing Manjeev Singh Puri. A look at his profile shows, Kwatra joined Indian Foreign Service in 1988 and worked in various capacities at MEA and India’s diplomatic missions abroad. Before being assigned to Kathmandu mission, he was the Ambassador to the European Union, Belgium and Luxembourg. Born in 1959, Puri had joined the Indian Foreign Service in 1982.
Kwatra is a member of the Indian Foreign Service with an experience of nearly 30 years in a range of assignments. Between 1993 and 2003, he served as Desk Officer at Headquarters dealing with United Nations, and subsequently in the Diplomatic Missions in South Africa and Uzbekistan.
Nepalese are of the belief and are confident that favorable and conducive cooperation will be forthcoming for maintaining peace, stability and development in days to come. Since H.E. Ambassador has served as the Chief of the Economic, Trade while in SAARC Secretariat, we are confident that he is fully aware about Nepal’s situation, particularly of the business community. Private sector are confident and would like to request the ambassador to emphasize to their government that trade and economic issues between Nepal be accorded special attention to Nepal’s LDCs status as Nepal has planned to graduate from LDC to the developing country by 2022 and the group of middle income countries by 2030.
With the global and other bilateral issues overwhelming His Excellency, Nepali private sector understands that the trade and economic related issues will become a very small part of his daily business, but they are hopeful that even a small attention will be very helpful in putting before Indian government the hopes and aspirations of not only the business community of Nepal but also of the average Nepalese citizens..
The visits of the Indian Prime Minister Mr.Modi to Nepal and the visit of Nepalese President and the Prime Minister K.P Oli to India are some of the vivid reminders of the subsisting ties between Nepal and India.
Nepal needs to broadly utilize the economic and trade opportunities available in India, but it has not been able to do so due to problems like: weak productive capacity, inadequate infrastructure, low foreign direct investment, Lack of effective institutional mechanisms to address the imminent issues. Inefficient trade facilitation infrastructure including complex rules and regulations, Lack of coordination among trade and transport agencies, non-harmonized reporting of trade data. Absence of an accreditation board, and low margins of preference, IGC and IGSC more formal than business like The Small Scale Industries (SSI ) products are facing difficulties in export on account of complexities in the rules of origin criteria; Definition of SSI products to be made compatible with the provisions of Industrial Policy-2010
Oil pipeline has proved to be a boon for the economy. Nepal-India cross border petroleum pipeline project is coming closer to reality after more than 20 years in the planning. Gasoline [petrol, diesel and kerosene] started flowing. Regarding Fruits and vegetable import from India, taking into consideration the people to people relationship, Indian government help, cooperation is expected in establishing modern quarantine and pesticide check posts.
In the case of the Technical Assistance disbursement, Nepalese are of the view, which might take some time to conceptualize and implement, a mechanism of G to B be developed like DFID, USAID funded project so that the fund could be channeled to the recipient in a more effective and efficient way without much hassles. This will have more visibility and the impact will also be more.
Business of India has grown significantly. In the last couple of years. The benefits should also be taken equally from Nepal as well. But how? Let us discuss on the modalities. Capacity development programme to be launched to the relevant stakeholders associated with trade logistics. Management of Infrastructure like ICDs/ICPs under Nepalese private sector. Incorporate shipping in treaty of trade and transit. Despite the progress in trade logistics, Nepali traders are still facing a number of hurdles while transporting goods through Indian land: Increasing traffic at Kolkata Port, unavailability of adequate number of railway rakes, congestion at Birgunj Inland Container Depot, lack of full-fledged operation of Birgunj Integrated Check Post and excessive documentation process, among others, were the main concerns.
Nepal bound cargos have to fulfil compliance procedures under 37 different documentation steps, which takes an additional 3-4 days. “There is a need for enforcing a single window system and validation of the online documentation to reduce the number of days in cargo movement,”
Bulk cargo issue– should be open in other points like Ruphedia/Nepalgunj, Belahiya/ Sunali, Jogbani/ Biratnagar other than Raxaul/ Birgunj Expedite Construction and implementation of Integrated Check Post (ICP). Implementation of an Electronic Cargo Tracking System, Nepal should optimally use the Vishakhapatnam port and ask for the Dharma port for future transit transport. Major issues to be addressed for the effective operationalization of Vizag port for Nepal are: Due to unavailability of Nepal Consulate at Vizag port the documents are routed through Nepal Rashtra Bank in turn to trigger “go ahead” to Vizag customs from Nepal Embassy in New Delhi. This entire process is cumbersome and time consuming.
Nepal is facing a huge trade deficit with India, which is a grave concern for the economic and sustainable development of Nepal. So, we are looking forward for the Indian Government’s help in this regard. In terms of waving Non-Tariff Measures, Accreditation, bulk cargo issue.
To the Nepali Government, Nepali private sector would like to request to create an environment favourable for foreign investors in order attract them to Nepal. That needs, fore and foremost, political stability, security, infrastructure, and friendly policies.
To the Indian Government, our request would be to ensure reciprocal business relations. It can help by creating favourable environment for export of Nepali products to the Indian market. We, the private sector, wish to operate in a free and fair environment where both the governments work in harmony to promote and open-heartedly welcome our investments — both in India and Nepal.
To the Indian investors, we would like to say that there are enormous prospects of working in Nepal. This is the right time to invest in mega projects in Nepal, especially when we are talking about helping Nepal rebuild and the formation of various Acts and One window system in operation.
Because of its strategic geographical placement, Nepal could be an ideal location for the Indian private sector to base their businesses. From Nepal, they can tap into the markets of the two most populous countries of the world at once – India and China. Apart from that, there is always a local Nepali market. If you have any doubts about the returns to investment from Nepal, we would like you to look at the success stories of Ncell, Dabur, Unilever, Surya Nepal that are doing wonders with comparatively little investment in Nepal.
There are great opportunities in the hydropower sector. Indian companies have already entered Nepal’s hydroelectric projects. We have a potential of developing about 83,000 megawatts of hydroelectricity in Nepal, which is yet to be explored fully. There is also a great prospect of constructing an east-west railway line along the southern length of Nepal, as well as north-south highways facilitating Indo-China trade.
Imagine – people visiting Nepal to climb Mount Everest take a cable car from the base camp to descend to the Mahabharat hills, from where they take a bus ride to Nepal’s Terai enjoying the breathtaking views of the hills all the while. From the Terai, they catch a direct express train to Taj Mahal. Who wouldn’t like to come to such a trip? Imagine – people visiting Bodhgaya make a Buddhist circuit in India in a bullet train and reach Nepal’s Lumbini, from where they take a helicopter flight to the great Boudhanath Stupa in Kathmandu, and trek to the northern Himalayan monasteries of Mustang.
Use the feedback from the businesses and industries as input in devising the negotiating strategies. A committee comprising of the Nepali private sector business community and the Indian business community be formed to recommend to the government on the policy, trade, transit and daily operation issues. In the past such forum recommendations were well taken by both the Government.
Indian Embassy in Kathmandu deserves credit for ever willing support and sympathy to address the grievances of the business community in Nepal. As the Indian mission here, went even beyond the call of duty to immediately take up the issues of trade related irritants and try to solve them effectively.
For food items the lab test facilities have to be developed in both sides. For the import of Indian vegetables and fruits to Nepal, Indian government help and co-operation is sought in the infrastructure with latest technology. Similarly, Nepali ginger, tea, large cardamom, MNC like Dabur, Uniliver products should have easy access to India having the lab test and the excellent quarantine office.
Nepal and India both the countries should follow the principle of “prosper thy neighbor” policy by which it will stop migration, increases employment opportunities and increase market.
Unauthorized trade between Nepal and India has also a negative impact to both the countries so the formal trade should be encouraged for the mutual benefit of both the countries. On the FDI aspect, when we talk about Indian investment in Nepal, we should not only see what we have achieved, we should also focus more on the prospects and opportunities that lie ahead. The issue of IC crunch and the ballooning trade deficit and increasing import of the POL products are the matter of concern to be addressed.
Even small families develop misunderstandings so it is but natural to expect that apprehension will definitely occur when the relations between two countries are concerned. Therefore the important issue is not whether disputes arise or not; the important issue is how swiftly and effectively these irritants are addressed. If projects such as the Pancheswor, Arun III, Upper Karnali and Koshi hi-dam are completed, Nepal will be self-reliant on energy and irrigation.
Mr. Kwatra, a seasoned diplomat, as a new Indian envoy to Nepal once assumes office in
Kathmandu; his immediate challenge will be observing the Transit Treaty, help assist in adjusting ever increasing trade gap, hydro power development including the transmission line and the issue of Kalapani, among others.
To sum up, our very best wishes to the newly appointed ambassador Mr. Kwatra!