India-Nepal Relations
Towards a Partnership in the New Millennium

- SHYAM SARAN
Ambassador of India in Nepal

I wish to thank the Nepal Council of World Affairs and in particular, it’s President, Ambassador Jha, for extending to me this privilege of sharing my thoughts on India-Nepal relations, with such a distinguished and discerning audience. I must beg your indulgence since I am still a relative newcomer to the complex world of India-Nepal relations. I do not mind admitting to you that I am still in the process of educating myself in the many facets of our wide-ranging relations, each of which has its own historical background and particular nuances. What I will attempt to do is to present a broad-brush vision of where we would like to see our relations headed in the new millennium.

India-Nepal relations are anchored in a shared cultural legacy whose beginnings are lost in the mist of time. There is a familiarity amongst our peoples that is born out of a long history of interaction, an interaction which continues with reinforced intensity in contemporary times. This legacy is an invaluable asset in fostering our bilateral relations, but like any relationship, it needs to be nurtured. It must never be taken for granted. We must never assume that because we have this shared history of political, commercial, cultural and religious interaction, good relations will follow in the natural course of things. Such complacency may lead us to ignore or minimize the consequences of divergent perceptions and differences of opinion. There should be an in-built early warning mechanism in the management of our relations which enables us to deal expeditiously with differences as they arise. We must prevent such differences from gathering a cumulative negative charge through neglect until they mask even the most positive understandings of our relations.

When we speak of management of our relations, we cannot limit ourselves to government interaction alone. Governments are part of the story, not the whole story, and not necessarily even the most important part of the story. India-Nepal relations are marked by a breathtaking range and intensity of interaction, in which virtually all sections of our society take part. In our contemporary information age, public perceptions of each other influence government policies. These public perceptions are in turn created by various opinion leaders, such a media, academic institutions, non-governmental organizations and what one may broadly call the civil society in a country. Even if there is frequent contact and interaction between our government, we can neglect civil society dialogue only at our peril, because in today’s would there is much more to relations between countries than mere government to government relations. I n the vision that we have for our relations in the new millennium, we will seek to broaden our dialogue so that not only our political leaders and bureaucrats talk to each other, but so do our scholars, journalists, artists, scientists, youth, women and the many non-governmental organizations and social entities. Misunderstanding should be dispelled not only between governments but also only between respective societies and opinion leaders goodwill to be reinforced, not merely between our respective political leadership but also between our civil society leaders.

The extraordinary thing about India and Nepal is the degree of complementarities that exist between our countries and which awaits being explored to mutual advantage. Nepal has rich water resources. Judicious projects for the utilization of these water resources could meet India’s growing needs of power and earn revenues for Nepal. Joint projects could address the problems of flooding or drought and bring irrigation to agricultural lands on both sides of the border. This could be a win-win situation for both countries, instead of becoming a source of mutual recrimination and mistrust.

Take the tourist sectors, which for Nepal, is a major source of income. Nepal is blessed with extraordinary natural beauty, a rich and unique cultural heritage and a relatively well-developed tourism infrastructure in many respects. It also has places of pilgrimage that attract both Hindus and Buddhists. Currently, there are nearly 5 million India tourists who are visiting foreign countries each year. Nepal has the potential to attract a sizeable segment of this outbound traffic with only a modest investment in promotion. It is significant that during 2002, it was only the tourist inflow from India which registered an increase while visitors to Nepal from other regions declined significantly.

India can also be a major source of investment for Nepal. Even though India is a capital importing country, its exports of capital are nearing a billion dollars annually. In fact, 50% of all foreign investment in Nepal is already from India. Given the fact that Nepal has virtually duty free access to huge and growing Indian market, investment in Nepal need not be limited to Nepal’s relatively smaller domestic market. Nepal can capitalize on its proximity and privileged access to the Indian market to attract foreign investment including from India. Several well-known Indian companies would be prepared to set production bases in Nepal, not only to serve Nepal domestic market, but also Indian states bordering Nepal, such as West Bengal, UP, Uttaranchal and Himachal Pradesh.

India, like Nepal, is a developing country. However, there are areas where India has certain modest achievements to its credit. Consider, for instance, India’s IT industry, which is now exporting over US$7 billion in software services. IT penetration in Nepal is still limited and the market is likely to remain small in the foreseeable future. However, Nepal’s software industry could ride piggyback on the Indian IT industry through joint ventures, outsourcing from Indian companies and doing sub-contracting work for Indian software providers. Since a sizeable number of Nepali nationals have received specialized IT training in Indian institutions, they would be able to mesh very easily with their Indian counterparts. In time, this would lead to the development of a significant IT industry in Nepal, which is a pre-requisite to the creation of a modern economy and society.

There are several other areas of high technology in India, which Nepal could profitably make use of for its own development. This includes Space Sciences and Biotechnology among others. India is today the cheapest source of high-resolution remote sensing applications, using its IRS Satellites. Nepal could gain immensely from use of such technology to monitor its environmental situations, study changing weather patterns, undertake accurate crop surveys and locate mineral resources. Or take the bio-tech sectors – Nepal has one of the richest reserves of medicinal herbs and plants. This exceedingly rich and diverse pool of genetic resources needs to be preserved and at the same time carefully and judiciously utilized for commercial applications. India has made significant advances in this field. In fact, India is one of the few countries which has a separate Department of Bio-technology, dedicated to developing our expertise in this frontier field of science. India is ready to share its technology with Nepal.

India and Nepal share a 1751 Km long open border. I consider this an asset, despite calls heard on both sides of this border that it needs to be closed or at least regulated. I do not believe that given the nature of the terrain and the family and kinship ties that extend across the border, it will be possible to seal it in any effective manner. In fact, if we pursued greater economy integration across the border, this would benefit both countries, particularly both our bordering states and districts. For example, as I pointed out, Indian companies are interested in setting up production bases in the border areas, to serve not only Nepal but Indian Border States as well. We could set up institutions of higher learning, hospitals and other facilities which could serve people on both sides of the border. In many cases, the economic viability of such a facility depends upon the density of its use. Access to clients on both sides of the border would precisely meet this requirement. I think that while a closed border may not be in the interest of the people of the two countries, the problems that face our two countries require an effective mechanism to monitor movement across the border.

What we would like to see in the new millennium is a new economic dynamism in our border areas, with greater economic interaction between India’s northern states and southern Nepal. We need to promote such interaction through better infrastructure linkages, such as link roads as well as railways and communication links..
Sometime back I said that our Nepalese friends should not look upon their country as India-locked but India-open. It is important to avoid a seize mentality. On India’s part, we should refrain from looking at the India-Nepal border only as a source of danger, as a kind of a soft-under-belly, which makes India vulnerable. Similarly, Nepal needs to look at India as a looming opportunity, not a looming threat of domination. The dangers of an open border can be addressed effectively it there is sensitivity to each other’s security concerns, and arising out of that, a willingness to cooperate on addressing those concerns. There needs to be far greater emphasis on the opportunities that present themselves in our unique relationship, including the mutual benefit to be derived from cross-border projects.
Mr. President, distinguished guests, what we could like to see in the new millennium is a mutually rewarding and dynamic partnership between our two friendly neighboring countries. This is a partnership which must encompass all sections of our respective societies, not merely governments. We need to broader the scope of our bilateral dialogue and create an environment in which the complementarities in our relations can be exploited to mutual benefits, which sometimes prevents this from being realized. We must deal with sources of mistrust seriously and expeditiously, but we must not focus only on the negative aspects, ignoring the many positive elements that also constitute the totality of our relations. If we handle our relations in this balanced and forward-looking manner, the new millennium could certainly become the golden age of India-Nepal friendship.

Source: Vividh Bharat (Ambassador’s opening remarks at the talk program organized by Nepal Council of World Affairs on January 10, 2003)

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