The recent landmark visit of Narendra Modi to Nepal, the first by an Indian prime minister in 17 years is seen as a ray of hope for New Delhi-Kathmandu bilateral relations. Will the new Indian government be able to address the growing distrust between the two countries, especially vis-à-vis resource-sharing? Will the sanctioning of the $1 billion aid to Nepal act as a starting point to strengthen relations? 

The Landmark Visit 

The visit has been quite successful in building faith and cooperation between the two countries. With this historical visit, both nations are hoping for a boost in the bilateral; especially in the energy sector. Modi assured that India does not want free electricity, and instead intends to purchase it. This proposal from India would have reduced apprehensions amongst the Nepalese. They can negotiate the prices, and that may even find her a place among the developed countries’ list in future.

Modi discussed 51 agendas in the joint commission meeting with his Nepali counterpart Sushil Koirala. Furthermore, a working team has been formed to finalise, discuss and engage in dialogue over the agendas raised in this meeting. This implies that both the countries intend to implement decisions in swift manner. 

Modi’s address to Nepal, which he began in in the Nepali language, and where he talked about his close relations with the country, earned him positive responses from the country’s parliamentarians. He also gave his ‘HIT’ formula for Nepal, where H: Highways, I: Information ways and T: Transmission ways, which too received positive feedback. Additionally, Modi’s decision to renegotiate the 1950 India-Nepal Peace and Friendship Treaty nears resetting ties with the country. 

What are India's Objectives? 

India’s decision to sanction $1billion in aid to Nepal is a good step towards economic assistance and cooperation. Nepal has the world’s second-largest hydroelectric power potential. It geographical proximity to India will work favourably to assuage the water and electricity problems in India. India will benefit from Nepal’s estimated hydel power potential of at least 40,000 MW –  of which Kathmandu has developed only approximately 600 MW of hydropower. This means a bulk of the economically feasible generation of hydropower has not been realised yet. If this could be realised with the extended aid, it will prove beneficial for both Nepal and India in future. 

Second, sandwiched between India and China, Nepal has strategic importance. China’s investments in Nepal as a part of its policy has provided direct strategic connectivity between China and Nepal via the Tibet route. This poses a threat to India’s internal security of India as, with this, the Chinese forces will have some extra easier access routes into India – which New Delhi does not want. Therefore, India is making attempts to enter Kathmandu’s good books so as to advance its respective strategic goals of combating insurgency due to cross border linkages. 

Third, China has always tried to weaken India’s influence in Nepal.  Therefore, India always fears its neighbours reaching out to outsiders for help and playing against it – and tries to maintain its hold in South Asia. The Indian prime minister picking Nepal as the destination for his second official visit since assuming office is therefore not a mere coincidence.