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New roads, transport corridors could boost India-Nepal ties

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India-Nepal must reset ties

Improving connectivity will be the focus for India and the landlocked Nepal, which needs to access ports to boost its trade activities.

“India and Nepal must establish a workable mechanism that focuses solely on matters of connectivity-- promoting highway, railway and air linkages among others in a systematic fashion. Planning for a five to 15 year horizon is imperative,” Bhaskar Koirala, Director of the Nepal Institute of International and Strategic Studies told India Narrative.

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Koirala added that it cannot be business as usual for the two countries. “Governments must abandon business as usual attitude, instead give priority to crafting a set of policies that are based on a fresh set of ideas, bearing in mind that a sound economic recovery for Nepal would no doubt revolve around a practical and efficient conjoining of self-sufficiency (by boosting domestic production and consumption) with robust engagement to the external environment,” he said.

The South Asian nations are also looking to operationalise the much-awaited Bangladesh-Bhutan-India Nepal (BBIN) Motor Vehicles Agreement (MVA) project, aimed at boosting connectivity in the region. Experts have noted that the BBIN project would be critical for economic recovery in the region.

Nepal is also dependent heavily on India for access to ports though Kathmandu has also been granted access to Chinese ports now.

India accounts for 64 per cent of Kathmandu’s overall trade volume.

At present, a chunk of Nepal’s trade—both imports and exports – are routed through the Haldia and Vishakhapatnam ports. However, sources said that India could open up more ports for Nepal. The country could even be granted access to the deep water Sittwe port.

The Sittwe port is currently being developed by India in Myanmar’s northern Rakhine province,

The port, at the mouth of the Kaladan river, is being developed as part of the Kaladan Multi-Modal Transit Transport Project.

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Sources also said that a mechanism needs to be put in pace to ensure overall better logistics and which would save time and for movement of goods between Nepal and the Indian ports.

According to the Economic Times India has agreed to provide Nepal access to Dhamra port in Odisha and Mundra in Gujarat. The two countries have been negotiating to facilitate trade through inland waterways from Haldia to Nepal through rivers Koshi and Gandak.

While China has given access to Nepal to use its ports, negotiations for the same took time and were laced with hiccups.

“Nepal needs Beijing and China has been a good neighbour to us but India will remain special, China cannot replace India,” Udaya Shumsher Rana, former minister of state for finance and a member of Nepali Congress recently told India Narrative.

The Observer Research Foundation noted that Nepali aspirations have been unshackled and India must recognize this.