Chair: P. Stobdan
Discussants: Ashok Mehta and Sangeeta Thapliyal

The paper, An Exploratory Framework for India’s Relationship with New Nepal, was presented by Dr. Nihar Nayak. Professor P. Stobdan was the Chair. Maj. Gen. (Retd.) Ashok Mehta and Prof. Sangeeta Thapliyal were the external discussants; and Dr Smruti Pattanaik and Dr. Pushpita Das were the internal discussants.

The paper brought out the complexities associated with the Indo-Nepal Treaty of Peace and Friendship signed on July 31, 1950. It identified some key elements which should be incorporated to make the Treaty more acceptable to both sides. At the outset, the presentation briefly focused on the important Articles of the Treaty, highlighting that the key objective of the agreement was to promote peace and friendship between the two states. Mutual politico-economic, socio-cultural linkages and security requirements were underlined as common concerns. Highlighting the element of reciprocity, the paper argued that one key element of the treaty was that it offered economic opportunities in India for Nepalese nationals against Nepalese assurances that India’s security concerns would be respected. The external political environment in the form of the shadow of the Cold War was one of the overwhelming factors shaping concerns and perceptions on both sides. Chinese adventurism in Tibet and apprehensions over Communist influence in Nepal were some of the factors that drove the two countries towards a settlement of issues.

Dr. Nayak argued that over the years, the treaty has emerged as a nationalistic issue and is considered a major constraint on Nepal’s independent foreign policy. In fact, during his official visit to India in 2008, the Nepalese Premier emphasized that there should be a “clear revision” of the treaty. Highlighting the Nepalese and Indian perspectives, the paper brought out the key irritants associated with the treaty. While Nepal was overwhelmingly concerned with issues relating to security and the unilateral imposition of restrictions on the free movement of people across the border; India was conversely concerned with the number of Nepali immigrants and the presence of ISI in Nepal, who could be working in tandem with Chinese intelligence.

Dr. Nihar Nayak pointed out that despite irritants and opposition from both sides, especially Nepal, the treaty has not been abrogated by either side, an issue which he considered curiously serious, because Clause 10 provides for abrogation as a viable option. The paper also highlighted the mutually beneficial relationship between the two countries. On trade, Dr. Nayak argued that India is Nepal’s largest trading partner. Seventy per cent of total Nepalese trade is with India. Also, bilateral trade and investments have greatly improved between the two countries. India’s share in Nepal’s total trade made a quantum jump form 26 per cent in 1996-97 to almost 41 per cent in 2000-01. In fact amongst the SAARC countries, India’s trade growth has been the fastest with Nepal and total trade stands at half a billion dollars accounting for around 25 per cent of total India-SAARC trade. However, hydro-projects, transit and employment benefits to Nepalese migrants in India are possible areas of cooperation between the two countries. Notwithstanding the mutual benefits, the relationship between the two countries remains strained. New Nepal, Dr. Nayak argued, provides an opportunity towards strengthening bilateral ties between the two countries. He suggested that the treaty needs adjustment, review and updating, keeping in view changing security and economic realities. Both governments, he emphasized, also need to agree not to allow the use of their respective territories for activities harmful to the national security interests of the other. Also, both countries should not enter into any kind of military alliance with third countries.

Maj. Gen. Ashok Mehta argued that the concept of New Nepal is questionable, as it is an ongoing process. He pointed out that the fact that there was no earlier call for abrogation of the treaty was incorrect as the call for change had come from Manmohan Adhikari. He noted that the main problem with the 1950 treaty was that all provisions of the treaty were in breach in themselves and none of them were operational. He also pointed out that one of the main problems with the 1950 treaty was that the implications of the treaty had not been studied in detail, engendering parochial politics for vested interests. Gen. Mehta underlined the importance of identifying new concerns in Nepal, pointing out that Nepal and Pakistan were two factors which ought to be taken into account while discussing India-Nepal relations.

Prof. Sangeeta Thapliyal noted that the paper needs to revisit the underlying context of its title. She argued that it was important to identify the groups and political actors in Nepal opposed to the treaty. She also noted that Nepal’s fears need to be taken into account and consequent ramifications for the treaty. It was also important to discuss what kind of a relationship India wanted with Nepal.

Dr. Smruti Pattanaik pointed out that the issue of abrogation is directly linked with political posturing. The 1950 treaty needed to be seen in the context of identity politics. She pointed out that domestic politics in Nepal was primarily responsible for the failure of the 1950 treaty and that there was a need to bring out the Indian perspective on the treaty more clearly. Dr Pushpita Das pointed out that it was important to argue why India should opt for a revision of the treaty.

Some of the points raised during the discussion were:

• The issue of remittances going to Nepal was important.
• Issue of perceptional factors regarding the image of Nepali workers in India should be considered. Also, identification cards and certificates need to be issued to Nepali migrants in India.
• It was important to outline the status of Indian business interests in Nepal.
• Domestic concerns are far more important to Maoists in Nepal than the 1950 treaty.
• The 1950 treaty could offer a broader framework for a better Indo-Nepal bilateral relationship.

Prepared by Medha Bisht, Research Assistant at the Institute for Defence Studies and Analyses, New Delhi.