| Complex yet intimate relation between India and Nepal |
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| World Affairs Talk | |
| Friday, 15 June 2007 | |
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There are historical, geographical, cultural, linguistic, ethnic, social and family links between people living in India and Nepal. Trade relationship between these two countries often goes beyond the economic reason significantly influenced by the social-ethical norms and values. India has long been counting on the Himalayan barrier of northern Nepal as its natural defense against China in one hand and anti-Indian terrorist groups are using Nepal as a base of guerrilla operations in another. Booming India also sees Nepal as a big market for achieving economical benefits. Historically, there occurred several instances when Indian foreign policy towards Nepal caused a feeling of anger among the Nepali people. Similarly, Nepal caused anger among Indian political circles through its failure of controlling the Maoist movements. Now given the significance of Nepal to India's security interests and an untouched market, India gives huge importance to the relation is has with Nepal. Time has come though to reassess the relation after a major political change in the Himalayan country. India actually had an unclear foreign policy towards Nepal. In 2005, when King Gyanendra assumed direct power in Nepal; China, Pakistan and Russia viewed it as a purely domestic issue. The Indian government reacted negatively at occasions and stayed away from a regional summit to meet the Nepali King. India even temporarily suspended military supplies to protest the King's take over of power. This policy was rather contradictory because at the same time, India pampered Bhutan's autocrat King. India in 2006 resumed military aid such as jeeps, bulletproof jackets and mine-proof vehicles to Nepal after Prime Minister Manmohan Singh met with king at the Afro-Asian summit in Jakarta. This move angered democratic forces who were staged country wide protest to force the King to replace democracy. They thought the Indian government, instead of helping their cause, was strengthening the hand of monarchy. In 1989, Nepal ended 1978 treaties between the countries that had provided for highly favored reciprocal trade terms and transit rights towards India. India responded by imposing a trade embargo and closed 13 of 15 transit routes. Nepal at various times also expressed concern about what it sees as India's 'bullying' behaviour in the region. The conventional economic wisdom holds that trade is beneficial to growth of a country. Although one country may have a higher productivity in the production of all goods compared to another country, the relative productivities in producing different goods will differ. Trade relation with India is rather crucial to Nepal particularly due to her land-locked geographic characteristics. Nepal opened up its economy in the early 1990s with the adoption of economic reform package. The reform measures have since covered almost all sectors of the economy including trade and investment, fiscal and monetary policies, financial and capital markets and other economic and social sectors. A new bilateral trade treaty signed with India in 1996 supported the trade reform program of Nepal. The treaty allows Nepal to export manufactured products to India free of customs duty and quantitative restrictions. Now that Nepal has decided to establish a democratic republic, Indian role in the region has become far more important. The popular support for democracy has been overwhelming and the Nepalese populace has very high expectation from the new government. However, as the experiences of several new democratic countries and Nepal's own past democratic experience suggests, democracy takes time to deliver. It is in Nepal's own interest to involve India in helping it build a strong democratic state. India also should pass a nice gesture. Share & Bookmark             |
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| Last Updated ( Saturday, 16 June 2007 ) |
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