We are yet to see if the Eminent Persons Group (EPG) meeting can pull Nepal-India relations out of one of the historic lows in the past 65 years. For relations to get back to normal, it is important to put the past behind without forgetting the lessons it has provided. The European economy would not have unleashed itself if it had hung on to the war discourse. The East African Community would not be taking great strides if they had kept bilateral political issues ahead of economic benefits. The time is now to really think ahead about how Nepal-India relations can be rebuilt to provide a foundation for the benefit of both the countries.
It is now important to see if we can build a relationship infrastructure at the level of Indian state capitals and Nepal’s future provincial capitals. Bhutan Prime Minister Tshering Tobgay made sure that he was present at the installation ceremony of West Bengal Chief Minister Mamata Banerjee because relations with Arunachal Pradesh, Assam and West Bengal are key for Bhutan. Bhutan is now going ahead to have a consular office in Guwahati. Nepal needs to open consular offices in Dehra Dun, Lucknow and Patna in addition to Kolkata. Similarly, Indian consular offices should be established in Biratnagar, Bhairahawa, Nepalgunj and Mahendranagar in addition to Birgunj. This can only help to really serve the people who really need to be served and build better people-to-people relations.
Trade And Movement
Currently, Nepal has no clear laws relating to Indians working in Nepal or Nepalis working in India. Nepalis working in India are not under the purview of foreign employment laws and regulations, making formal recruitment of Nepali workers by Indian firms difficult. Similarly, the ambiguous work permit rules in Nepal for Indians are used more as a tool for control than facilitation. In the spirit of the 1950 friendship treaty, a new framework for free regulated movement for work needs to be prepared wherein people can formally work in each other’s country by bringing remittances, taxes and social security issues within legislative frameworks. This will ensure that people from both sides benefit. In some parts along the border, the movement of people is from India to Nepal and in other parts, from Nepal to India. Therefore, a framework without prejudice and irrational nationalism is the way ahead.
For Nepal’s private sector, India has been a market to send goods either legally by taking advantage of legal loopholes or by engaging in informal trade. The institutionalisation of black market networks during the blockade has rekindled 1980s-type business activities. A section of the Nepali private sector made a mockery of the 1996 Trade and Transit Treaty and continued to demand entry of duty-free goods into India that are produced out of repackaging industries in Nepal.
Similarly, on the Indian side, non-tariff barriers like quarantine has continued to hamper exports of Nepali agricultural products that have comparative and competitive advantage for the country. The issue of Certificate of Origin should be reviewed and a new framework on exports to India should be prepared. Investments need to made in world class testing labs in the border areas. Protocols should be made that accept global certification norms and not homemade rules that are basically aimed at protectionism.
Indian stock markets are great investment opportunities for Nepali investors, therefore, the fundamentals discussed 20 years ago need to see the light of day. Nepalis should be allowed to invest in Indian markets by Nepali regulators up to a certain amount each year. Similarly, Indian nationals should be allowed to invest in Nepal’s secondary market to start with and then primary markets. We need to take advantage of a fixed exchange regime. Further, Nepali companies should be allowed to list their shares on Indian stock exchanges thereby providing them access to larger Indian investors. With both countries having online tax platforms and technology as an enabler, cross-border investments today are much easier to regulate than a decade ago.
Window Of Opportunity
Nepal has never learnt from its mistakes. One of the major problems with our bilateral relationship has been the absence of an ambassador in India for more than three years. We paid dearly for that. Now, the political syndicates do not think it is important to have an ambassador in place for even the first EPG meeting. We need to ensure that the Nepal Embassy in Delhi has an ambassador who can keep formal channels of diplomacy going and ensure that all the formal committee meetings of bilateral structures take place at regular intervals. The more formal the relationship between the two countries with diplomats and bureaucrats managing it, the fewer opportunities for politicians to make ‘Dilli-pilgrimage’ trips and try to get Indian political actors and intelligence agencies involved. Further, we need to restructure bilateral security apparatuses so that the security forces, police and intelligence agencies on both sides can work together to ensure that the free movement of people across the border is not taken advantage of undesirable elements.
The formation of the EPG provides a window of opportunity to recalibrate the discourse. Historically, there have been very few successes in the formal engagements between the two countries. It is time to make them work and prove history wrong. The pitfalls of further debacles in bilateral relations are not good news for either country. We need to make it work.