Border benefits

The open border must be a major plank of economic and diplomatic relations between India and Nepal

The open border between India and Nepal has been the vantage point of the two countries' trust-based relationship. But a closer look at this border regime shows a lack of impetus in transforming this unique arrangement for the enhancement of trade relations between the two countries, thus leading to a failure of the border regions to tap into the potential of trade activities.

Gains for both

Many places in the Madhubani district in India's north Bihar share boundaries with Nepal. These places offer immense opportunities to maximise trade and civil cooperation. Sadly, Indian authorities have taken a lacklustre approach in helping build roads and rail infrastructure across the border in Nepal.

Kathmandu, too, has surprisingly failed to show interest. Nepal has no rail network beyond a symbolic and outdated small stretch between Jaynagar in Madhubani and Janakpur in Dhanusha district in Nepal. Telecom and postal cooperation, which has great potential to foster civic ties, is also missing.

These shortcomings indicate a flawed approach to border talks between the two countries. There seems to be a clear and sharp disdain for tapping economic opportunities and while delving on this issue, the geographical spread has to go further—to other parts of north Bihar, Uttar Pradesh, West Bengal and Uttarakhand.

The federal structure of India restricts the states' authority and action when it comes to international matters. So it is imperative that New Delhi and Kathmandu be serious about these issues, which are currently being handled half-heartedly without any vision. It is time for India and Nepal to go beyond formal barriers and translate rhetoric into action.

Nepal has emerged as a more confident nation amidst the democratic transition. Nepalis today no longer see the monarchy as an option. This is a welcome development in the country, where, until recently, political authority was seen as inseparable from the royalty. Historic political upturns have tested the country in many ways. But amidst many setbacks, Nepal has emerged as a forward-looking modern nation. These developments have close bearing on Nepal's relations with India.

Potential gains

Yet, in recent years most high-level Nepali delegations visiting Delhi have been ignoring the potential of trade relations between the two countries. It is surprising when even a prime minister-led delegation prioritises rudimentary concerns over core issues.

Take as an example the fact that India is the world's largest milk producer. It reached this position through early adaptation of technology and impressive cooperative movements, not through keeping high numbers of cattle alone. Nepal is a milk deficit country but its plains are conducive for a white revolution. So it should seek India's overall expertise and try to create a success story like that of Amul in Gujarat.

The power sector is another area where the passive stances of both countries are harming their economic interests. There is an immense potential for cooperation—especially in hydroelectric production and transmission. Sadly, India's industrial chambers—the Confederation of Indian Industries, Federation of Indian Chambers of Commerce and Industry and Associated Chambers of Commerce and Industry of India—have not been able to move beyond tokenism in furthering multi-sphere trade cooperation with their counterpart in Nepal—the Federation of Nepalese Chambers of Commerce and Industry.

Most delegations have wasted much time and energy signing Memorandums of Understanding without observing the feasibility of new projects. Treaties between these two countries need immediate revision. Trade or diplomatic negotiations in 2014 cannot be handled by the policies of bygone eras. New Delhi has a lot to do on this regard and it must do so for the mutual interest of both countries.

Border problems

As India faces the constant threat of terror attacks, safeguarding its open border with Nepal is high on its to-do-list. Time and again, Nepal has closely cooperated with Indian security agencies in cracking down on terror outfits, most recently the Indian Mujahideen network. But there are many problems along the border that must be addressed by both sides.

Illegal trade is rampant as official vigilance is not up to the mark. This administrative failure could make Nepal a parking lot for terror activities, as India is the most targeted country by both international and homegrown terror outfits in the whole of South Asia. India cannot afford to overlook this aspect, so it has to guard its borders with greater sensitivity. Nepal also has a shared interest here. The border, therefore, should be made a major plank of India-Nepal diplomatic negotiations.

Next month, a new government will be formed in India. The new prime minister should start a new beginning by visiting Nepal before flying to distant locations. India must show this courtesy to its closest ally, which has not been given its due in the past—especially if we recall the Indian PMs' lack of interest in visiting Kathmandu. That unusual shortcoming has shadowed even the good intentions shown.

To make trade and diplomacy work fairly, India and Nepal should move beyond tokenism and enter a new phase of cooperation. Nepal should not preclude itself of benefiting from India's economic rise and India should not miss the opportunity to further cooperation with a politically stable Nepal.
-Atul K Thakur
Email: summertickets@gmail.com
(Published in The Kathmandu Post on April29,2014)

India's industrial lobbies are crumbling

The return of these institutions to the fold of big business houses and the consequent weakening of executive control in these chambers have damaged their credibility and are detrimental to their sustenance

On hindsight, it is safe to say that India Inc no longer runs through legitimate lobbies. Recent years have witnessed a sharp fall in the quality of leadership at India’s premier business chambers — the Federation of Indian Chambers of Commerce and Industry, the Confederation of Indian Industry, the Associated Chambers of Commerce and Industry of India and the National Association of Software and Services Companies. This has led to sagging morale in business circles, with furious voices emerging from the inside.

The return of these institutions to the fold of big business houses and the consequent weakening of executive control in these chambers are detrimental to their credibility and sustenance. These institutions are more the victims of inner strife than the economic slowdown that has plagued Indian industry in recent months.

It is worthwhile to recall that ‘lobbyism’ is itself a hyper-materialistic term which is often used to refer to the clout of the old boys’ network that uses the backdoor approach to get things done. Lobbying is an established phenomenon in the US, but clearly what may be fine in an alien land is not acceptable in India. Still, some people like a former CII chief (whose untainted reputation lost much of its sheen after the

Radia tapes came into the public domain) have sought to push the culture of lobbyism. UPA2, with its propensity to plunder public resources, has ensured that such systemic ills happily flourish. It is unlikely that the Government’s insensible use of the carrot-and-stick policy which pampered business tycoons, will lead to any improvements. It will only encourage sleaze in business and accelerate the downward spiral in trade.

The crucial issue here is that the Government rarely does anything that is notionally wrong, but routinely falters at the implementation level. The converging of politicians’ business interests with those of the industrialists can only fudge the lines between politics and business.

A recent case in point is the FIR lodged by the CCenttral Bureau of Investigation against Kumar Mangalam Birla. The Government sought to spin the news in its favour but the Supreme Court and a former Coal Secretary did not allow it to hide the Prime Minister’s Office’s explicit mishandling of coal block allocations. Moreover, the UPA’s own Ministers, including Mr Anand Sharma, spoke their mind and expressed displeasure over the Government’s risky adventure against Mr Birla.

The Ministers fear slowing growth in such circumstances — already, India’s corporate entities are turning incompetent. There is also a disconnect between intention and action, making it highly unlikely that the Indian economy will return to its lost growth trajectory soon. There is not much for trade bodies to look into at this point, as the current mess has happened at a high level, leaving no space for third parties to intervene.

The fight is on to save the face of the Government. And, except for the Supreme Court and the Election Commission, no other institution has effective authority to challenge the regime. Through indecisiveness and preferential treatment, the Government is doing its best to damage the entrepreneurial spirit in the country. Unfortunately, no voice can be heard against such moves from the industrial community, instead, it only whines on specific issues wherein its immediate interests come into play. The trade representatives are now pantomime actors.

Besides, these institutions had ceased to be the knowledge institutions long time ago, when motley groups of tainted management consultants begun supplying second-hand wisdom from within the various chambers’ crumbling blocks. Clearly, it is tough to be either on the side of the Government or the industry.

China has controlled its economy and implemented progressive reforms for over three decades, yet, it hasn’t been able to join the league of high-income nations. It is impossible to see India walking a smooth path in the coming years. If the country’s economic performance has to improve, steps must be taken renew faith in institutional frameworks.

Industry is a vital component of the nation’s growth and ‘profit’ is really not a dirty term, if it has some redistributive bearing. Economic growth and redistribution of wealth can happen simultaneously, if the Government and trade and industry learn to work together.Finally, industry chambers too need to wake up and get their act together, if they wish to remain relevant. Or else, they will soon have no role to play at all.
-Atul K Thakur
Email:summertickets@gmail.com
(Published in The Pioneer on October28,2013)