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Nepal should take initiation to reduce trade deficit with India

Laxman Phuyal

March 31, 2022

6 MIN READ

Nepal should take initiation to reduce trade deficit with India

Deep Kumar Upadhyaya is a former Nepali Ambassador to India. Upadhyay, also a politician belonging to the ruling Nepali Congress party, had twice been appointed ambassador to India in a challenging time in politics.

Khabarhub approached Upadhyay to discuss Prime Minister Sher Bahadur Deuba’s India visit scheduled for April 1, and the agenda Nepal has to raise during the visit among many others.

Here are the excerpts of the interview:

Prime Minister Sher Bahadur Deuba is going to visit India, how do you see it?

This is a diplomatic opportunity. We need a pretext to improve the relationship. Our main problem now is the border dispute. The will power from the highest political level is a must to pave way to the solution. Initiations have to be taken to resolve the issues. The way out has to be sought through dialogue. The same is true of water use. Discussions should be made on how to utilize the water resources. Even if Nepal is called a sovereign country contrary to international law, there is a tendency to take water wherever it pleases without Nepal’s consent.

There is an issue of Mahakali embankment. Forcible obstruction of the water should be stopped no matter what the pretext for obstruction might be. When used wisely, Nepal’s river is a boon for Nepal as well as for UP and Bihar in India. Failure to do so is a curse. The second agenda is to make good use of water.

21st century is the water century. Whether it is for drinking water or for irrigation or agriculture, water is a prime factor. Hence, the agenda can include the use of water as the source of energy, flood warning, water distribution by constructing reservoirs, if both of them agree. This can benefit both nations.

Nepal is bordered with India on three sides. Despite having an easy route for the trade of Nepali goods in India, the Nepali goods have not been able to get Indian market easily. The trade deficit has skyrocketed.  There have been various rounds of talks on reducing the trade deficit; however, the talks have failed to bring substantive result. It needs to be brought to India’s attention. There is the possibility of energy trade.

Nepal’s electricity can not be exported to other world markets provided India does not consent. The visit should include such issues in the agenda list. We have to show the will to resolve these issues diplomatically. We have to start from scratch.  Discussions on the border issue seem to be slowing down as it is discussed at the secretary level.

What can be the homework, preparation and main agenda of the government before the visit?

There are many agenda discussed before. These are old agendas. There are things that India has not been able to do. This requires extensive preparation. The government must have made a good preparation. This visit is an opportunity to recall all these issues. Bilateral committees should be active and identify all these problems at all levels and direct them towards solutions. The election is imminent. This government is a coalition government formed under compelling circumstances. The single visit might not suffice. However, the Prime Minister can work out for the base.

In the future, the relations between the two countries will be better. The mishap in Mahakali’s tuin (rope way) mishap, the vaccine procurement, the agricultural fertilizer issues have to be discussed. Rather than ignoring such issues, one has to go to find the cause and fix it, so that the age-old relationship gets further stronger. Ignoring the issues does not end the anti-India sentiment. It must end.

Both governments should take it in mind that each of them should try not to undermine the other.

Political leadership’s willpower matters a lot in such cases. Prime Minister Deuba also holds the Ministry of Foreign Affairs. Both these bodies need to understand and take initiative in such matters.

Our foreign policy seems to be a bit of confusing. Chinese foreign minister paid a visit recently. We need to convince what happens to Nepal after the MCC issue. We should reassure our neighbors that we will not do anything inconvenient for them. Unless there is a single voice of the leaders and the parties in the issues related to the foreign policy and security, foreigners are likely to play tricks.

How can the visit of the Prime Minister help in strengthening the bilateral relations between Nepal and India?

There is nothing wrong with diplomacy, the relationship is cordial. However, we have to keep in mind that sweet words are not enough. But the country needs results. The results show the maturity. Substantive evidence helps to make the relationship deeper.

Nepal has also said it will provide transmission lines for energy trade with Bangladesh. Nepal expects India’s facilitation on it. Bangladesh is interested in the energy trade. Bhutan is eager for energy trade as well. It may be our weakness not to pay attention to such things. Diplomacy has to work to ensure benefits and results for the Nepali people. We have to focus on solving our problems without making the country uncomfortable.

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