Former Nepal PM Pushes for Increased Indian Investment to Reduce Trade Deficit

July 31, 2015

New Delhi: Describing India as “Nepal’s largest trade partner, largest source of foreign investment and of tourist arrivals”, HE Sher Bahadur Deuba, former Prime Minister of Nepal today noted that Nepal and India enjoy “excellent bilateral relations based on cordiality, good will, mutual respect and cooperation”. Shri Deuba was delivering a talk on ‘India-Nepal Relations in the Current Context’ at the Institute for Defence Studies and Analyses (IDSA) on July 31, 2015.

Describing Prime Minister Narendra Modi’s visit to Nepal last year that “provided a new momentum in our multi-dimension relations”, Shri Deuba lauded India’s generous assistance in both infrastructure and human resources development for key projects in much needed sectors. Lauding India’s ‘Neighbourhood First Policy’ he said that the policy has generated a sense of respect and euphoria in south Asia, with both regional and sub-regional processes gaining adequate momentum in the region.

The former Prime Minister, however, expressed concern over Nepal’s increasing trade deficit with India and pushed for increased Indian investment in his country along with simplification of processes related to trade transaction, relaxation of rules of origin and duty free access of Nepalese products in India. Bilateral agreements like BIPPA and the Power Trade Agreement of 2014 can be stepping stones towards reducing the trade deficit between the two nations, he stated.

Better connectivity – physical, institutional and people to people – was also sighted by the former Prime Minister as another imperative to further strengthen relations with India.

Speaking on Nepal’s progress in formulating a new democratic, federal and inclusive Constitution through the Constituent Assembly, Shri Deuba hoped that the “promulgation of the constitution would herald a new era of institutionalised peace and stability and strengthen democratic institutions”. He said that “a series of agreements among the political parties; the recent 16-point agreement being the latest one, have generated crucial understanding to move forward by forging common position on some of the key issues of the new constitution.”

While admitting that Nepal cannot afford to remain in “perennial transition” that has cost the nation a lot in terms of political stability, economic development and social progress, he noted that “our efforts are geared towards accommodating the legitimate concerns and aspirations of all segments of Nepalese society.” The former Prime Minister also reaffirmed his nation’s commitment towards being a Federal state.