Mr. Pushpa Kamal Dahal, Nepal’s new Prime Minister, also known as Prachanda visited India for 5-days starting from 15th September’08. Leading a 44-member delegation, including four ministers, government officials, heads of industry associations, business federations and journalists to India, the Nepal PM undertook exhaustive consultations with India’s leaders in his first-ever ‘political’ visit after assuming power.

In New Delhi, Prachanda called on President Pratibha Patil at the Rashtrapati Bhawan and held wide-ranging talks with Prime Minister Dr. Manmohan Singh on various bilateral and regional issues. He visited India’s IT capital Bangalore before leaving for Kathmandu.

Business Meetings

Speaking at a luncheon meeting held in the honour of the visiting dignitary by Indian business houses CII, FICCI and Assocham in New Delhi, the Nepal PM allayed all misgivings on the business climate in Nepal, after the present dispensation took over.

Prachanda made a strong plea for Indian investment in Nepal saying, “The government of Nepal remains committed to adopt every possible measure to provide investors the necessary security including repatriation of capital and profit earned by them.” He said this was to allay the fears of industry houses in India who were worried about the security and labour problem in Nepal after a labour problem broke out in one of the pharma groups, which has a manufacturing facility in Nepal.

Prachanda said, “Because of our cultural and historical tradition of economic interdependence, our relations with India are crucial and vital and cannot be compared with China.”

Prachanda assured the investors that a high-level investment board, headed by him, would be constituted soon to introduce reforms in industrial policy to create a simple and investment-friendly environment to ensure fast track solutions to industrial problems.

New Nepal

Nepal is one of the seven countries in the Indian Subcontinent and is perched on the southern slopes of Himalayas sandwiched between India and China. The highest peak of the world, Mount Everest lies on its northern boarder with Tibet in China. The Nepalese currency is also Rupee and is tied to Indian Rupee by an exchange rate.

There had been profound changes in Nepal in the past few months. Nepal’s last king vacated the royal palace soon after Prachanda too over as PM on August 18. The new Mao regime carries the agenda of a new Nepal. As far as the relations with India are concerned, the huge trade imbalance in favour of India bothers Nepal and the Maoists had been very vocal in demanding the scrapping of 1950 bilateral treaty defining travel, business, social and economic ties, saying the treaty does not address the Nepali aspirations.

From the ashes of a civil war that claimed over 13,000 lives, Prachanda’s Maoist-led government now intends to revitalise one of Asia’s poorest nations, replacing talk of armed revolution with high dose of investments. They want a transformed Nepal, and they describe it as the ‘Switzerland of Asia.’

Big Success

Back in Nepal, the PM said the visit his visit to India had given a new dimension to the bilateral relations between the two neighbours. “India has assured us of necessary support in the country’s peaceful transition into the new era,” the Nepal PM noted. “India’s assurance to build the 200-megawatt Naumure hydroelectricity project in west Nepal indicates India wanted to contribute to Nepal’s development,” Prachanda said.

On the trade treaty, the Nepal Prime Minister had said in India, “The 1950 Treaty has brought us this far...If someone says it has only worked against Nepal, this will not be a correct analysis. But, now it needs a change, to help the relationship get stronger, based on the new ground realities. A Task Force which India and Nepal have decided to set up will examine the issue.”

However, both sides have considered it prudent not to comment on which portions of the treaty they would revise. This apart, no timeline has been set for the meeting between the two Foreign Secretaries in the joint statement by Prime Ministers Manmohan Singh and his Nepalese counterpart. The efficacy of the 1954 Kosi Agreement too came into scrutiny after the devastating floods caused by a breach in Kosi embankment in Nepal, left over 100,000 homeless in Nepal and affected over 3 million lives in Bihar.

This apart, other water resources projects were reviewed in detail, with an immediate focus on the Sapta-Kosi high dam project, Sunkosi diversion scheme and the Kamla dam project in the backdrop of the recent devastating floods affecting both the countries.

He also thanked India for an emergency relief package of 320 million rupees (431,000 dollars) for victims of the Kosi River flooding, which struck both sides of the border, as well as credit to ease fuel shortages in Nepal.

According to Mr. Durgesh Man Singh, Nepal’s envoy to India, “The visit provided broad political direction to forge a 21st century relationship and set at rest any speculation about Nepal’s pro-China tilt”.