View from the Himalayas | Delhi and Kathmandu: So close yet so far
Reimagined in 2014, India’s Neighborhood First Policy has its doubters in Kathmandu. The lack of tangible progress in power exports is a case in point.
On July 25, Indian Parliament’s External Affairs Committee completed a report on India’s Neighbourhood First Policy (NFP) based on deliberations with the external affairs ministry officials and a couple of foreign-policy experts.
Though the report keeps short of offering an analysis of India’s foreign policy within the ambit of the NFP, it offers extensive details on New Delhi’s engagement with its south Asian neighbours including Nepal. The committee subjected NFP to a detailed examination for a period between 2019-2023.
In fact, the political stage for the policy was set as early as May 26, 2014, when Narendra Modi, the newly elected prime minister (PM), invited heads of government from all south Asian countries during his swearing-in ceremony – a first.
Other than the much-publicised visit by former Pakistan prime minister Nawaz Sharif, the then Afghan president Hamid Karzai and former Sri Lankan president Mahinda Rajapaksa also attended the event, as did the previous prime ministers of the Himalayan nations, Bhutan and Nepal - Tshering Tobgay and Sushil Koirala.
On his first day in office, Modi’s emphasis on the primacy of the neighbourhood in India’s foreign policy calculus was strongly symbolic. When he visited Kathmandu in August of that year, he also became the first Indian prime minister to do so in 17 years.
A year later, he was the first standalone Indian prime minister to visit Sri Lanka since 1987. In the aftermath of the devastating earthquake in Nepal (also called the Gorkha earthquake) in April 2015, Operation Maitri (which entailed rescue, relief, rehabilitation, and reconstruction) became India’s largest post-disaster assistance programme outside the country.
As PM, Modi has made five visits to Nepal; he had more visits only to France, Japan, Germany and the United States.
The NFP emphasises that the neighbours should draw benefits from India’s economic growth and political rise. Here it is important to understand both how India views the policy and what are the hurdles to the generic foreign-policy pronouncement as its neighbours see it.
The newly released report points out (quoting an unnamed foreign secretary) that the policy got more salience after 2014 when the BJP government decided that the neighbourhood needs more attention, built on the recognition that the optimal management of bilateral ties with the immediate neighbourhood is as much a domestic security and economic imperative as it is a strategic foreign-policy requirement.
The report also stresses that the policy has close linkages with India’s border areas, particularly its Northeast, which borders Bangladesh, Bhutan, Myanmar, China and Nepal. And both Nepal and Bangladesh border five Indian states. Sikkim, West Bengal, Bihar, Uttar Pradesh and Uttarakhand in the case of Nepal; and Assam, Meghalaya, Mizoram, Tripura and West Bengal in case of Bangladesh.
Nepal shares close to 1,850-km long border with India; India shares more than 4000-km border with Bangladesh, making it India’s longest international border.
While India’s security concerns are understandable, the report emphasises, New Delhi must also focus on building economic and infrastructure connectivity with neighbours.
Expedite export of power from Nepal to India
For Nepal, India is not just the largest trading partner, the bilateral trade is also heavily in favour of India, a major political irritant in Nepal-India ties. As a result of economic protectionism, the report quotes an expert, India has neglected its borderlands and neighbours.
Power export to India has emerged as a potential economic leveller in the long term for Nepal, but the export regime faces major political and bureaucratic hurdles, both in the short and medium terms.
There is a persistent concern in Kathmandu, not least in the political circle, that New Delhi’s policies could prevent Nepal’s expansion as a power exporter. India enjoys monopsony – a sole market – in Nepal’s power exports and will remain dependent on the Indian grid in its bid to diversify the power market to Bangladesh.
While New Delhi and Kathmandu initiated a 25-year framework agreement on power exports to India during Prime Minister Pushpa Kamal Dahal alias Prachanda’s recent India visit, the agreement is yet to be signed two and a half months after the visit. The agreement will ensure long-term market access to Nepal’s exports and open new opportunities for investment in its power sector.
The lack of tangible progress in power exports continues to draw public attention in Nepal after what was believed to be a breakthrough during Dahal’s Delhi visit. There was widespread euphoria in Nepal, particularly among stakeholders in the power sector, when Modi announced that India would import 10,000 megawatts in 10 years during his joint press conference with Prachanda, observed the Kathmandu Post early this week.
On August 5, Modi and Prachanda spoke on the phone, with the Indian PMO later stating that the two leaders reviewed various aspects of the India-Nepal bilateral cooperation and followed up on discussions held during Nepal PM’s recent India visit.
Nepal, a close and friendly neighbour, the PMO said, is a key partner in India’s NFP. As far as Kathmandu is concerned, the key, for now, squarely rests with India. Delhi could surely do better to ease Nepal’s current economic slowdown and, towards that end, facilitating power exports in the long term would deliver a political message to the Nepali people: That India’s NFP is committed to the idea of shared economic prosperity in the immediate neighbourhood.
Akhilesh Upadhyay is a former editor of the Kathmandu Post, and a Senior Fellow at IIDS, a Kathmandu-based think tank. The views expressed here are personal.
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