Nepal prime minister to visit India this week

[Galaxy]

Nepal prime minister to visit India this week

Nepal Prime Minister Baburam Bhattarai will be in India this week on a trip that, analysts say, provides New Delhi an opportunity to rescript its ties with the strategically located neighbour.

Bhattarai's 20-23 October visit is his "first bilateral visit abroad" after taking charge as prime minister of Nepal, underscoring the special ties between the neighbours, said an Indian foreign ministry statement on Sunday.

As Nepal's fourth prime minister in as many years, one of the challenges the former Maoist rebel faces is how to accommodate some 20,000 former rebels into his country's regular army, a move that is resisted by the latter.

Bhattarai met India's Prime Minister Manmohan Singh on the margins of the United Nations General Assembly in New York last month, the foreign ministry statement said. During his four-day visit, Bhattarai will again hold talks with Singh, call on President Pratibha Patil, and meet representatives of Indian businesses, it said.

"Nepal is of immense importance to India, given its location between China and India. For a long time, it has been viewed as a buffer state between the two," said C.U. Bhaskar, former head of the National Maritime Foundation think-tank. "Nepal has had a special status vis-a-vis Indian security because a large number of Nepalese are part of the Indian army."

According to Bhaskar, Bhattarai's visit will help cement stronger political ties, given that the neighbours have not been on the best of terms due to political turmoil in the Himalayan country that abolished its two-centuries-old monarchy and declared itself a republic in May 2008. New Delhi rolled out the red carpet for then Nepal Prime Minister and chairman of the Maoists, Pushpa Kamal Dahal, during a visit the same year, but ties did not become as warm as anticipated.

India's security concerns include links between Nepalese Maoists and India's Maoist guerrillas, who are active in a large swathe of territory. Another worry is that Nepal could become a conduit for anti-India activities fomented by Pakistan.

"There are also concerns vis-a-vis China and the tendency of bigger states to play one smaller state against another," Bhaskar said.

Former foreign secretary Lalit Mansingh said India should be ready to offer economic assistance to Nepal during Bhattarai's visit. "Nepal is in a precarious state economically and financially, and it is likely that Bhattarai will ask for Indian assistance that India should give," he said. "Bhattarai is a pragmatic leader with strong links to India. So, India should be open to his success and make his visit successful."

This, Mansingh said, will illustrate that India does not have any animosity with the Maoists as a political party and will support any government that has the backing of the Nepalese people.

According to the Indian foreign ministry, India is Nepal's largest trade partner and source of foreign investment and tourists. "Bilateral trade between India and Nepal has increased substantially since the signing of the trade treaty in 1996 and received further impetus after the signing of the revised trade treaty in 2009, which has provisions that allow Nepal greater access to the Indian market," it said on its website.

Provisional trade figures for 2010-11 show that Nepal's bilateral trade with India stood at Rs.16,129.7 crore, which accounted for 58.7% of Nepal's total external trade, the ministry data said.

India also remains Nepal's largest source of foreign investment, accounting for 44% of such investments. Indian investments in Nepal amount to Rs.1,586 crore with 462 foreign direct investment projects.

Investing in Nepal's vast potential in hydroelectric power, estimated to be around 43,000 megawatts, will be good for both countries, Mansingh said. "India should do these things keeping its long-term strategic interests in mind as well as for its own development needs that Nepal can help with."

Nepal prime minister to visit India this week - Home - livemint.com

 

[Tshering22]

I really pray that these UPA idiots play well with Nepal this time, without doing the disaster of pre-Gyanendra era. That one disaster nearly cost us a national friend.

 

[Galaxy]

India, Nepal ink economic pacts

Breaking the stagnation that marked bilateral relations over the past two years, India and Nepal signed major economic agreements, aimed at enhancing Indian investment and developmental aid, on Friday.In a meeting, Prime Minister Manmohan Singh and his Nepali counterpart Baburam Bhattarai arrived at a broad political understanding, whereby India expressed its firm support to the peace and constitutional process underway in Nepal.

The two sides formalised the long pending Bilateral Investment Promotion and Protection Agreement (BIPPA), which commits one State to providing compensation to commercial entities, whose country of origin is the other. This applies particularly in cases of wars, national emergency, and armed conflict. Investments from either country in the territory of the other country are to be accorded 'National Treatment' and 'Most Favoured Nation' treatment. It also provides for elaborate dispute resolution mechanisms between investors and the government concerned, and between governments, including international arbitration. Finance Minister Pranab Mukherjee and Nepal's Industries Minister Anil Jha, signed the pact in the presence of the two PMs. The agreement's overall objective is to promote investment flows between the two countries.

While Nepal had asked for soft loans of $1 billion, the final pact provided a $250-million line of credit to Nepal to finance infrastructure projects, at the concessional rate of interest of 1.75 per cent annually. An MoU in this regard was signed by India's Exim Bank and Nepal's Finance Ministry. India also provided grant assistance for a goitre control programme in Nepal. Despite extensive negotiations, the two sides failed to agree on a double taxation avoidance agreement which was on the agenda.

PITCH FOR INVESTMENT

Earlier in the day, Mr. Bhattarai told the Indian business community that the agreements showed Nepal's 'sincerity and seriousness' in ensuring protection to investment.

Making a strong pitch to investors about Nepal's potentialities, he said: "There is scope in infrastructure, hydropower, tourism, agro and food processing, mining, finance, education, health, and information, communication and technology sectors. Nepal also has human resources with the skills and positive attitude towards work." Mr. Bhattarai added that Nepal had simplified tax structures, and got preferential treatment in international trade due to its status as a Least Developed Country.

Responding to complaints about frequent strikes, Mr. Bhattarai said the business community should keep in mind that labour would revolt if there was a threat to income security. "Social security for workers is essential for labour flexibility."

India has also extended its support to the peace and constitutional process. After his meeting with Mr. Bhattarai, External Affairs Minister S.M. Krishna told journalists that it was for Nepal to sort out the issues related to the peace process and Constitution writing.
"India will be willing to do everything within its powers to help, depending on the comfort level of Nepali political actors."

A senior Indian official, who wished to remain anonymous, said Mr. Bhattarai's visit was an 'unqualified success.' "It shows firm Indian political support for Bhattarai's government, and we are banking on him to complete the political transition. There is also recognition on both sides that our relations need to have a strong economic content."

A member of the Nepali delegation confirmed to The Hindu that India did not push security-related issues that Nepal finds politically uncomfortable to deal with, namely extradition and mutual legal assistance treaties.

The Hindu : News / National : India, Nepal ink economic pacts

 

[Galaxy]

New promise in India-Nepal ties

Jyoti Malhotra / New Delhi October 24, 2011

India and Nepal have agreed to reinvent their age-old, but sometimes prickly relationship, with the promise of moving full speed ahead on the bilateral trade and economic front, even as Delhi offered Nepali Prime Minister Baburam Bhattarai all help in skilling and rehabilitating Maoist cadres in case Kathmandu wanted it.

Bhattarai returned home to Kathmandu on Sunday after a four-day visit to India, having spoken freely and frankly in public as well as privately with Prime Minister Manmohan Singh on the political and economic obstacles which confronted him at home. On top of the list was the reintegration of the Maoist cadres into the Nepal Army—anything between 5-700 cadres — and rehabilitating the rest, as well as writing a Constitution which reflected the unique mix of tribal (janjati) and upper-caste valley folk as well as the ethnically similar population in the Nepali Terai with India.

The Nepali prime minister also said he hoped India would assist in the economic redevelopment of Nepal, whether it was connecting the electricity grid with the Terai — or the immediate delivery of 100 Mw out of 200 Mw to help it tide over its lean period — or a $ 1 billion credit line to build a fast-track highway from Kathmandu to the Terai, or large-scale power projects in which Nepal could ultimately sell the excess electricity back to the northern Indian states of Bihar and Uttar Pradesh.

TRICKS OF THE TRADE

SUCCESSES

* Bilateral Investment Protection Agreement (Bipa)
* $250-mn credit line signed
* Joint commission revived
* Eminent Persons Group created
* Commerce secretaries will meet to resolve trade irritants
* Much better confidence in each other's governments

FAILURES

* No $1-billion credit line to build highway between Kathmandu and Terai
* No double taxation avoidance agreement
* No power trade agreement
* No reduction in additional customs duties, etc – only promises to do so in future

Minister of state for information and technology Sachin Pilot went to the airport to see the Nepali prime minister off this evening, a courtesy the Indian establishment extended to Bhattarai, after it was pointed out in the Nepali press that upon his arrival, only the government's chief of protocol had received him.

Bhattarai, hardly a great orator in the sub-continent tradition, was nevertheless able to capture the imagination of his audiences in India, when he disarmingly spoke of how, "as a Marxist," he was often struck by the contradiction wherein revolutionary policy and Marxist theory was often the stuff of textual learning, when there existed the dire need to "assimilate and learn from ground reality."

Asked how he would describe his visit to India, the Nepali prime minister told the Business Standard : "I wanted to come here so we could get to know each other better. I have spent many impressionable years in India. This is a very important relationship for us."

Rameshwar Khanal, economic advisor to the Nepali prime minister, pointed out that the Nepali prime minister had taken "a big risk" in pushing for a bilateral investment protection and promotion agreement (BIPA)with India, when it was being opposed not only by the opposition Communist Party of Nepal-UML faction, but also within his own party.

"The prime minister believes there is no alternative to improving economic ties with India," Khanal said.

He pointed out that the BIPA was initialled as long ago as 1998, but was signed during Bhattarai's visit, as was the $250 million credit line promised last year and a Rs 1.8 crore goitre control programme.

An agreement on double taxation avoidance has been postponed, not put on the back-burner, because of some legal complexities that both sides promised they would clear as soon as possible.

Significantly, the Joint Commission to be headed by the two foreign ministers will be revived – it has met only once in 1991. This will look at ways and means on how to integrate the private sector as well as government enterprises in pushing big, medium-scale as well as small-scale projects inside Nepal.

Barshaman Pun, the finance minister who was during the ten-year civil war in Nepal a major commander in the People's Liberation Army, admitted to this reporter that he was "once very efficient in using a gun, but this new job is a bigger challenge. We have to improve the lives of our people."

Asked about Nepal's relationship with China, Pun agreed that Nepal's northern neighbour was "very powerful," but added, "Nepal needs India"¦we would like to play the role of a bridging power between the two."

Meanwhile, so as to show urgency as well as leverage the goodwill created between both sides, the two Commerce secretaries will meet to figure out how to quickly fix the irritants in the trade relationship, whether it is the enormous trade imbalance — of the total Rs 200 crores trade, Nepal imports 70 per cent of goods — Nepal's request for waiver of 4 per cent additional customs duty on 162 items, fixing the additional one-time lock by Indian customs between the Kolkata/Haldia port and issuing the necessary notification with regard to duty refunds.

Nepali observers who spoke on the condition of anonymity, accepted that "India had also changed in the last few months, and was willing to now do business with the Maoist government in Nepal. India has such enormous influence in Nepal, but sometimes we feel that you don't know how to exercise that influence."

Asked how he would describe the visit, India's ambassador to Nepal Jayant Prasad said : It was highly successful because it helped both sides to get to know each other better; fact is both India and Nepal have arrived at a new way of dealing with each other, which is that we look ahead, instead of behind us, all the time."

New promise in India-Nepal ties