When Sushma Swaraj visits Kathmandu later this week, she will have a challenge — and an opportunity — to give a new direction to India-Nepal ties. What she achieves in the Himalayan nation will be crucial to setting the stage for Narendra Modi’s visit there. When Mr Modi goes to Nepal, it will be the first bilateral visit by an Indian prime minister to that country in 17 years. Much has gone wrong in India-Nepal relations in the recent past, resulting in a drift in New Delhi’s engagement with Kathmandu. Nepal itself has been caught in the web of a difficult political transition in the aftermath of the end of the Maoist insurgency. India had earned the goodwill of the political class and the common people in Nepal for its role in persuading the Maoists to end their armed insurrection. It is another matter that the Maoists and other political groups in Nepal had failed to live up to the people’s expectations. Their failure to draft a new Constitution has not helped the country’s democratic transition.
However, the continuing political stalemate has taken a toll on Nepal’s economy and on its attempts to reduce poverty. Given Mr Modi’s emphasis on economic issues, the focus in India-Nepal ties should now shift to greater economic engagement. When she goes to Kathmandu, Ms Swaraj may have to face questions about some of the agreements that the two sides have been negotiating for some time. From Kathmandu’s point of view, the most significant of these questions relate to the draft of the power trading agreement. Official and political circles in Kathmandu resent this draft as ‘unequal’ and would like New Delhi to modify it. Water resources being absolutely crucial to Nepal’s economy, it would naturally want any agreement on hydro-power projects to be of mutual benefit to itself and another country. There are other issues, such as the revised extradition treaty and the settlement of border disputes, that have remained unresolved for years. But the differences over these issues may be easier to tackle if the two sides push for a larger scope of mutual engagement. How Nepal engages with China matters to New Delhi’s security concerns in the region. But it is for New Delhi to reassure Kathmandu that closer economic engagement is the key to the building of mutual trust. Ms Swaraj’s visit could lay the foundation for a brave new beginning in India-Nepal ties.