On 19 July 2023, the Vivekananda International Foundation (VIF) organised a talk on “Outcomes of PM Dahal’s Visit and Developing Indo-Nepalese Relationship”. Dr Arvind Gupta, Director VIF, gave the introductory remarks, followed by presentations by Amb Ranjit Rae, Lt Gen Rakesh Sharma and Mr Sanjay Chadha on the overall outcomes of the visit of PM Dahal, the security dimension and water resource cooperation. Dr Arvind Gupta welcomed the speakers and the participants and shared some key insights on the visit and the strategic significance of Indo-Nepal cooperation and relations for regional integration.

Outcomes of the visit of PM Dahal

The visit saw a lot of developments and progress in the bilateral relations between India and Nepal. For Nepal’s domestic context, support of the Nepali Congress is critical to PM Dahal and his party. Owing to the Bhutan Refugee Scam, there is a lot of pressure on the politicians in Nepal to consolidate power to avoid getting sucked up in the legal processes. Simultaneously, PM Dahal seems to be trying to unite all the parties to stand firmly against his former ally, the Communist Party of Nepal (Unified Marxist–Leninist).

In terms of the Indian context, through PM Dahal’s visit to India and other symbolic gestures, like a visit to Mahakaleshwar, he established that he is a reliable partner of India. He further ensured not to bring up any irritants in the relationship with India, like the Eminent Persons Group report, the Agnipath scheme or the issue of revision of the 1950 Friendship Treaty.

There have been other substantive achievements during the visit, like an agreement for India to import 10,000 megawatts of electricity from Nepal over the next ten years and India agreeing to power transmission line from Nepal to Bangladesh through India as part of trilateral cooperation. There was also a massive push for connectivity through the railways, integrated check posts, pipelines and, most importantly, extending the UPI digital linkage in Nepal. It was a crucial visit with many important developments; interestingly, the two countries gave no joint statement but separate statements.

Security Dimension

In terms of security and sovereignty, PM Dahal mentioned the boundary issue in passing, but no concrete discussions occurred. Further, even the energy concerns for Nepal were also addressed in the visit. With the initiation of pipelines and inland transportation connections in the recent visit, the disruption in supply of oil will be avoided and essential routes of trade will become more stable.

The issue of Gautam Buddha International Airport at Bhairahawa and Pokhara International Airport, both built with the help of Chinese help, also came up. Both the airports lack cross-border air routes between Nepal and India, as right after take-off, these planes come directly into Indian air space. Since it creates a security issue for India in Gorakhpur, India could not give access to the air space in those areas, due to which these airports are not in use.

Water Resource Cooperation

There are multiple planned hydropower projects in Nepal at the moment. Arun III project was already with India for its development, and after PM Dahal’s visit, the Lower Arun project was also awarded to India. However, the Lower Arun project was converted to a run-of-the-river project from a storage project by Nepal.

Another point of contention in the hydropower cooperation was the stalled Detailed Project Report (DPR) of the Pancheshwar Multipurpose Project (PMP). Both parties agreed to expedite the process, and a deadline of three months was set for finishing the DPR. The PMP project has been stalled for 27 years since the signing of the Mahakali treaty. Both India and Nepal have irregular meetings, have too many committees and lack commitment. The hydropower project calculations are not a zero-sum game, and both sides must resolve to come together for this positive development.