Differences over a treaty

Published : Sep 01, 2001 00:00 IST

Jaswant Singh, during his visit to Nepal, reiterates the demand for a review of the 1991 trade treaty. But the dominant opinion in Nepal favours its automatic extension in December.

EXTERNAL Affairs Minister Jaswant Singh's three-day visit to Nepal in the third week of August was the first high-level official visit from India after the assassination of King Birendra and other members of the royal family in June. Since the BJP-led National Democratic Alliance (NDA) government came to power three years ago, bilateral ties between the two countries have withstood a lot of strain and tension.

The events surrounding the hijacking of Indian Airlines' Flight 814 to Kandahar from Kathmandu airport in December 1999, caused bilateral relations to sink to an abysmal low. The resentment in Nepal against what is perceived as India's 'big brotherly attitude' runs deep as some recent events have shown.

Important changes have taken place in Nepal's politics in the last few months. There is a new King on the throne and also a new Prime Minister in office. Although the scars left by the events surrounding the regicide have yet to heal fully, the kingdom is limping back to political normalcy.

Sher Bahadur Deuba has replaced Girija Prasad Koirala, whom many Nepalese considered to be too pro-India, as Prime Minister. Deuba, who had a short stint as Prime Minister in the late 1990s, is also more acceptable to the Maoists. The Maoist leadership now seems inclined towards negotiations with the government.

The Nepali media have described Jaswant Singh's trip as a "familiarisation visit". The monarchy continues to play a critical role in the politics of the country. Jaswant Singh is said to be close to the Jodhpur royal family, which has close links with Nepal's royal family.

Of particular worry to New Delhi is the growing clout of the Maoists in the politics of the kingdom. The Maoist leadership considers India as a junior partner of the United States in the region. In its world view, as articulated in the writings and pronouncements of individual leaders, the U.S. is the "imperialist" world power while India is the "hegemonist" regional power.

The view in the Indian national security apparatus, which finds resonance in the right-wing media organs, is that the Nepali side is allowing the Pakistani Inter-Services Intelligence (ISI) a free run of its territory. Publications that espouse the right-wing Hindu ideology are of the opinion that even the Left parties in Nepal are in cahoots with the ISI.

Jaswant Singh told Indian journalists that there was proof of ISI activities in Nepal and that he brought the issue to the notice of the Nepal government as the "security of India and Nepal are interlinked". The government of Nepal reiterated that it would not allow its territory to be used for anti-Indian activities by third countries.

But the issue that is currently engag- ing the attention of the government and people of Nepal is the India-Nepal trade treaty, which is due for renewal in December. The treaty has a provision for automatic five-year extension if both sides have no objection. But New Delhi has suggested a "review" of the 1991 treaty before extending its validity beyond December 3, 2001. Jaswant Singh told his hosts that India wanted substantive discussions on some of its provisions and would like to incorporate "necessary adjustments" in it.

New Delhi has expressed its misgivings about misuse of certain provisions of the treaty, including the one that gives Nepalese products duty-free access to the Indian market. Indian manufacturers feel that foreign goods routed through Nepal are undercutting the market for their goods. There has been a noticeable spurt in the export of items such as acrylic yarn, vegetable oil, iron and zinc pipes and copper twines from Nepal.

According to reports appearing in the Nepali media, Jaswant Singh told Nepalese businessmen to work towards sustaining long-term interests in bilateral trade. The basic objective of the trade pact was to help Nepal develop its industry. But the tendency of some Nepali businessmen to import materials from third countries and pass them off as Nepali produce was contrary to the spirit of the treaty, said Indian officials.

However, the Nepali Chamber of Commerce (NCC) denied the allegation. "We assured the Minister of the genuineness of our products. We also told him that we strictly follow certification rules," said an official of the NCC.

Indian allegations about the violation of the treaty by Nepalese businessmen were way off the mark, said informed Nepali sources. They claimed that the current problems cropped up only after the BJP-led government came to power. The Nepal government was happy with the 'Gujral doctrine' that the previous National Front government had followed. Countries of the South Asian Association for Regional Cooperation (SAARC) were given concessions without India insisting on reciprocity.

One of the allegations against Kathmandu was that it was exporting a huge amount of vegetable oil, which New Delhi suspected was from third countries. Nepalese sources pointed out that their country being predominantly agricultural, it was but natural for it to produce vegetable oil in abundance.

India's Foreign Secretary of the time, Lalit Mansingh, during his visit to Kathmandu seven months ago, had indicated that New Delhi wanted a review of the trade treaty. A week before Jaswant Singh's visit to the kingdom, India's Trade Secretary had signalled that New Delhi wanted to have a second look at some of the provisions in the treaty. Nepalese sources believe that the Indian inflexibility on the issue could see a repeat of the crisis that erupted between the two countries in 1989, when the Rajiv Gandhi government temporarily stopped the movement of goods meant for Nepal.

The other bilateral issue high on the agenda was the flooding caused in the Nepali areas of Russial-Khurda-Lautan near the border with India. The construction of a dam on the Indian side of the border was said to be the reason. If the Nepali media are to be believed, the sacred area around Lumbini, where the Buddha was born, was under threat from the rising waters. Nepal claims that 15,000 hectares of land capable of producing 30,000 tonnes of food has been affected.

Jaswant Singh said India had stopped the construction work from the middle of July after Nepal protested. This assuaged Nepali feelings, but Nepal insisted that the height of the dam should be reduced. It said India unilaterally increased the height of the dam.

The dam, in eastern Uttar Pradesh, is apparently a prestige issue with the State's Chief Minister, Rajnath Singh. With elections to the State round the corner, both the Chief Minister and Prime Minister Atal Behari Vajpayee are in no position to make further concessions on this issue. Besides, the Indian government is claiming that irrigation is a State subject, over which it has no jurisdiction.

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