India’s Neighborhood-first policy yielding positive results (Statement)


Speech by Hon. Shri Sher Bahadur Deuba

Former Prime Minister of Nepal & Leader of Nepali Congress at Programme organized

By Institute for Defense Studies and Analyses

New Delhi, India


Excellencies, Friends, Ladies and Gentlemen!

I would like to begin by offering my heartfelt condolences on the sad and untimely demise of

former President of India, APJ Abdul Kalam.

It is an irreparable loss for all of us. He was a great scientist, a committed humanist and a source of inspiration to all, especially youth and children. In his demise, Nepal has lost a great friend. I have vivid memory of meeting him at Rastrapati Bhawan while I was Prime Minister. I was struck by his simplicity, intelligence and saintly personality. I salute his inspirational life as a man of great achievement and brilliance.

Excellencies and Friends!

I express my sincere thanks to the Institute for Defense Studies and Analyses· (IDSA) for giving me this opportunity to share my thoughts on Nepal-India relations in the present context at this gathering of eminent personalities, intellectuals and friends of Nepal.

I have come to India at a time when Nepal is engaged in the final stage of promulgating a new democratic, federal, and inclusive Constitution through the Constituent Assembly. A series of agreements among the political parties, the recent 16-point agreement being the latest one, have generated crucial understanding to move forward by forging common position on some of the key issues of the new Constitution.

We will build on it and take on board all stakeholders in the spirit of inclusiveness since we cannot afford to remain in perennial transition, which has cost a lot in terms of our political stability, economic development and social progress. Our efforts are geared towards accommodating the legitimate concerns and aspirations of all segments of the Nepalese society, including those that have been voiced in the recent public hearing of the draft Constitution, The promulgation of the Constitution will herald a new era of institutionalized peace and stability and strengthened democratic institutions. We also remain committed to Nepal becoming a federal state. We are equally aware that sustainable peace and stability can be achieved only when we ensure economic prosperity to our people. Hence, while we focus on giving final’ shape to the political process, we attach importance to the socio-economic development needs of the country.

 Friends and Excellencies!

As you all know, a devastating earthquake of 7.8 Richter magnitude struck Nepal on 25th April of this year, which caused massive human loss, suffering and destruction of infrastructure. This earthquake was followed by four major aftershocks of more than 6 Richter magnitude, as well as one which was more 7.3 after 17 days that caused even more damage and distress. Our closest neighbor India was the first to lend us support. I fondly recall the prompt action by Prime Minister of India Hon. Shri Narendra Modiji in sending the rescue and relief teams, both civil and military, to Nepal within hours of the first earthquake under “Operation Maitri”. We received spontaneous and generous relief supplies including food, medicine, tents and blankets from the Government and people of India, including non-government, religious and private sector organizations as well as from individuals. This proves that our friendship remains firm even during difficult times.

I equally appreciate the participation from India at the level of Minister for External Affairs in the International Conference on Nepal’s Reconstruction held on 25 June 2015. While assuring continued cooperation in Nepal’s reconstruction, India pledged one billion US dollars, one fourth of it as Grant. This pledge is over and above. India’s .existing bilateral developmental assistance of another one billion US dollars over the next five years, forty percent of which would be Grant. The pledge at the conference of substantive contribution to the post earthquake reconstruction of Nepal by India is testimony to the strong bond of friendship and cooperation existing between Nepal and India.

In the context of Nepal’s post-earthquake disaster needs and reconstruction plan, we count on India’s continued support, both from government and private sector, in rebuilding the infrastructure destroyed by the earthquake. It may be pertinent to mention here that though the effect of earthquake on tourism infrastructure was not so significant and key areas such as Lumbini, Chitwan, the Annapurna trekking route, etc., are unaffected and safe to visit there has been a significant drop in tourism. I also wish to state that though 14 out of 75 districts of Nepal were severely impacted by the earthquakes, the international airport, all domestic airports, and almost all highways are in operation. There is no health problem reported· attributed to the quake. Thus, it is fully safe to visit Nepal.

On a different note, I am glad to state that Nepal and India enjoy excellent bil.ateral relations based on cordiality, goodwill, mutual respect and cooperation. I also take note with satisfaction that geographical proximity, extensive economic linkages, shared historical, religious, and socio-cultural affinity as well .as wider people-to-people contact have further enriched these relations.

The visit to Nepal by Hon. Prime Minister Qf India Shri Narendra Modiji in August last year, after a gap of 17 years at the level of Prime Minister, has created a new momentum in our multi-dimensional relations. His address in Nepal’s Constituent Assembly where he said Humaare sambandha kagaz ki kashiiyon se aagey nahi badhe hai. llumaare sambandha di/on ke daastan kahate hail” showed his tremendous good will towards Nepal and won the hearts of the Nepali people. Prior to the PM’s visit, the Joint Commission at the Foreign Minister level was also reactivated. As good friends we are equally committed to bringing our relations to a newer height.

Development assistance received from India has helped in both infrastructure and human resource development for key projects in much needed sectors. India is Nepal’s largest trade partner, largest source of foreign investment and of tourist arrivals. The private sectors and business communities of the two countries have played vital role in consolidating and strengthening our relations. However, I feel that the current level of interactions does not reflect our full potentials. Many areas still remain untapped. We are eager to invite the Indian investors to come and invest in Nepal.

Despite our long and diverse economic relations, the ever-growing trade deficit remains a matter of concern for us. Nepal’s trade deficit with India needs to be corrected in the interest of both the economies. As we are eager to increase the volume of trade between our two countries, we should also ensure that it is sustainable.

I consider that increased Indian investment, increase in the number of products being exported from Nepal, simplification of process related to trade transaction, relaxation origin and duty free access of Nepalese products is critical to address Nepal’s trade deficit. ·

It is encouraging to note that with a view to promoting, facilitating, expanding and diversifying trade between the two countries and encouraging collaboration in economic development, Nepal and India have signed BIPPA. To give further momentum to bilateral trade, Agreement for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income has also been signed. There is equality of treatment for foreign and indigenous investors in Nepal.

The signing of Power Trade Agreement on 21 October 2014 has enabled cooperation in the power sector, including developing transmission interconnections, grid connectivity, and power exchange and trading through the governmental, public and private enterprises of the two countries on mutually acceptable terms. I am especially pleased to note the progress that has been made by the establishment of the Joint Executive Committee of the Pancheswor Development Authority.

The Pancheswor High Dam Project has been a dream project for me since the beginning of the Mahakali Treaty almost two decades ago when I was Prime Minister. People living in both banks and downstream of the Mahakali River stand to benefit a lot from the construction of this high dam as it has the potential to generate 6,500 MW of hydro electricity and will also irrigate hundreds of thousands of hectares as well as control floods.

This project will herald in a new era for people well being of both neighboring nations.

The Project Development Agreements, that have also been signed, further demonstrate an upswing in mutually beneficial cooperation. The signing of MoU last year on Tourism Cooperation ·and the Motor Vehicle Agreement between the two countries has paved the way for promoting tourism. I would also like to reiterate that mutual economic benefits, especially investment in trade and tourism will be greatly increased by the road connectivity that will be enhanced between our two nations by the construction of the Fast Track Highway that will link  Kathmandu to the plain areas. I hope to see the construction of the Nijgadh Airport with the cooperation of the Indian Government in the same spirit and speed. I am happy to note that support to both these projects were especially mentioned by your External Affairs Minister Honourable Shri Sushma Swaraj ji during the donor conference in Kathmandu last month.

I believe that, in addition to strengthening bilateral mechanisms, emphasis should be laid on better connectivity – physical, institutional, and people to people – which serves as a bridge between the two countries and peoples including economic transactions. No doubt, Nepal’s location gives it an important role to facilitate wider connectivity in this dynamic region. As the largest and vibrant democracy in the world, India has consistently nurtured democratic values and norms. I appreciate the achievements made by India in economic, social, and scientific and other frontiers in the recent years. I admire the policy measures taken by India that have led to consistently high economic growth rate despite multiple global crises. Since India is rising as a major emerging global economic power, Nepal looks forward to a closer and intensive collaboration with such a vibrant economy so as to ensure a higher degree of prosperity for us.

India’s rise as a technologically highly advanced country of the world and Prime Minister Shri Modiji’s offer of the SAARC satellite as a gift for this region is a much appreciated as great initiative for mutual benefits from applied space science technology. The policy of India to promote cordial ties with countries in the neighborhood has generated a sense of respect and euphoria in South Asia. Both Regional and Sub-Regional processes are gaining desired momentum in South Asia. Neighborhood-first policy of India has yielded positive results and I welcome the emerging trends in relationship.

In this context, the business community from both countries can play important role, through enduring partnership and mutually beneficial activities, in the years to come. I am confident that the business leaders and industrialists from India will find Nepal an attractive investment destination and the Nepalese entrepreneurs the most reliable business partners. There are immense potentials for the development of hydro power projects, tourism, mining, forestry and agro-based industries as well as the construction sector particularly roads, transmission lines,airports and other infrastructure.

India has been supportive to’ Nepal’s democratic process with tremendous goodwill and solidarity. As Nepalese people strive to achieve a democratic, just, inclusive and prosperous society, I believe India would continue to extend its cooperation and support.I would like to stop my remarks at this juncture and thank you all for your patience. Thank


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