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 Nepal has no rail network beyond a symbolic and outdated small stretch between Jaynagar in Madhubani and Janakpur in Dhanusha district in Nepal.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)

Borders and boundaries

The open India-Nepal border best reflects the strength of ties between these two nations but their lackluster management reveals the compromised benefits that proper handling could have achieved. With the passage of time, the 1950 Indo-Nepal Treaty of Peace and Friendship, which broadly defines bilateral strategic and trade relations between the two countries, now needs an overhaul.

The 1950 treaty mandates that “neither Government shall tolerate any threat to the security of the other by a foreign aggressor” and made mandatory to both sides “to inform each other of any serious friction or misunderstanding with any neighbouring state likely to cause any breach in friendly relations subsisting between the two Governments.”

Primarily, these accords were meant to strengthen ties between the two countries, give Nepal preferential economic treatment and provide Nepalis in India the same economic and educational opportunities as Indian citizens. Also, it ensured that the India-Nepal border would be open and people from both sides could move freely across the border without passports/visas and live and work in either country.

However, by 1978, the trade and transit treaties were separated, owing to demands from Nepal.Unfortunately, in 1988, when these treaties were up for renewal, Nepal’s less pragmatic stand to not accommodate India’s wishes on the transit treaty forced India to call for a single trade and transit treaty. Nepal maintained its firm position, which led to an unprecedented strain on India-Nepal relations.

A virtual Indian economic blockade on Nepal continued till April 1990, which was a painful episode and should be remembered as insincere political moves were made by both sides. The countries hit a new low in bilateral relations after Nepal’s arms deal with China in 1988, albeit it was later observed that economic issues were the real determinant.

Rajiv Gandhi, then Indian PM, took the matter as violation of the treaties of 1959 and 1965 but failed to understand the extraneous clout India was enjoying with these treaties. As per Gandhi, “Nepal was in India’s security zone and was prohibited from purchasing arms without India’s approval.” Such clauses were naturally unacceptable to a sovereign nation like Nepal. However, it is also true that king Birendra’s actions were focused more on irritating his Indian counterparts than going against those treaties.

Thereafter, India linked security with economic relations and took action to review India-Nepal relations. Soon, Nepal had to rethink its position after dwindling economic conditions led to a drastic change in its political system, with the effect that the king was compelled to endorse a parliamentary democracy.

As expected, the new government quickly sought to restore normal relations with India. After that, the ‘special’ security relationship between India and Nepal was reestablished during the New Delhi visit of Nepal’s newly elected Prime Minister Krishna Prasad Bhattarai in June 1990. Six months later, Prime Minister Girija Prasad Koirala also visited Delhi and the two countries signed new, and separate, trade and transit treaties to provide more economic benefits to Nepal.

In April 1995, Prime Minister Man Mohan Adhikari visited New Delhi and negotiated well on a major review of the 1950 peace and friendship treaty. These three high-profile political visits from Kathmandu proved beneficial for India-Nepal relations. But 1996 onward, Nepal started losing its usual stream of politics under the virulent affects of an armed insurgency driven by the Maoists. The country ushered in a painful spiral of civil war with conditions becoming much grimmer with the highly suspicious royal massacre of 2001.

Gyanendra, the new king had neither the acceptance of the masses nor the capability to deal with a tricky political situation where the democratic movement was getting swiftly radicalised. In the further course of time, the Maoists made politics a popular but non-serious business through their unrelenting dubious acts. They made Nepal less progressive, going against their hyped claims, and blocked the country’s quest for better economic and diplomatic stakes in South Asia.

However, in present circumstances, a new course of action would do much good for the bilateral relations between India and Nepal and for other areas of Nepal’s interest. As prevailing strategic challenges are much bigger than in the 1950s and Nepal’s biggest quest should be to give its economy continuous momentum, the time has come when the open border must be handled more proactively to redefine trade and diplomatic cooperation between these two countries.

In particular, Nepal’s Terai region, which borders the Indian districts of north Bihar and Uttar Pradesh, could be turned into a major source of trade exchanges with India. Here, border management has to be more liberal. As someone hailing from the border regions, I have experienced the practical hurdles created by rudeness at the border check-posts. On many occasions, I have seen petty traders being exploited for no fault of their own by security personnel at the border.

Notionally, it is true that these two countries share liberal border but sadly, its entrepreneurial benefits have not reached the people living on both sides of the border. Through more progressive border plans, cluster-based trade relationships between India and Nepal could be taken ahead. This will also effectively change the pattern and outlook of bilateral relations at the macro level.

Improved trade relations would give India valid reasons for greater engagement with Nepal in developing road and rail networks along the border. A proper rail network between Madhuban-Janakpur, and a later extension to Kathmandu, will end the logistic hurdles of trade in Nepal. For decades, these small changes have been awaiting governmental action but few have their minds oriented there.Beyond the obsession with big treaties and imaginary outcomes, Nepal should pursue its relationship with India to improve its economic position.
-Atul K Thakur
Email: summertickets@gmail.com
(Published in The Kathmandu Post on May5,2013)