Modi Wins Hearts in Nepal, Shakes Hands with Maoist Opposition Leader Prachanda

Highlights of Joint Press Statement on the Visit of the PM Modi to Nepal

• Big Indian Push in Hydel Power, Roads in Nepal thru Financing

• Indian Infra Companies GMR, Jaypee, Adani to get Business, Buy Back of Power to Hungry Northern Grid

• Nepal Asks India to Forgive Defence Debt

• India to Release Soft Credit Line of $1bn

• The two Prime Ministers also underlined the need to further explore ways to enhance sub-regional cooperation particularly in the areas of trade, transit, connectivity and hydropower. They underlined that the high level visits are vital for greater momentum to the close and cordial ties between the two countries.

• The Prime Minister of Nepal stated that Nepal has focused its attention on drafting a new constitution through the Constituent Assembly, which will lead the country to greater stability and prosperity. He shared Nepal’s vision of graduating from the status of least developed country by 2022.

• The two Prime Ministers noted with satisfaction the reactivation of Nepal India Joint Commission at the level of the Foreign Ministers and welcomed the outcomes of the third meeting held in Kathmandu from July 25-26, 2014.

• The two Prime Ministers agreed to review, adjust and update the Treaty of Peace and Friendship of 1950 and other bilateral agreements.

• Underlined the need to resolve pending Nepal-India boundary issues once and for all. They welcomed the formation of the Boundary Working Group to undertake the construction, restoration and repair of boundary pillars including clearance of ‘No man’s land’ and other technical tasks.

• The Indian side stressed on early signing of the agreed and initialled strip maps of about 98% of the boundary. The Nepalese side expressed its desire to resolve all outstanding boundary issues.

• The two Prime Ministers welcomed the decision to establish an Eminent Persons Group on Nepal-India Relations (EPG-NIR) to look into the totality of Nepal-India relations from independent, non-governmental perspectives

• Directed the competent authorities on both sides to make sure that the open border, which has facilitated movements of people on both sides of the border and has been a unique feature of Nepal-India bilateral relations

• It was assured that Nepal and India will not allow their territory to be used against each other.

• The Government of India announced a soft credit line of US$ 1 billion for the execution of infrastructure development and energy projects as identified and prioritized by the Government of Nepal.

• The two Prime Ministers witnessed the signing of the Exchange of Letters regarding Terms of Reference of the Pancheshwar Development Authority. They agreed that the two Governments would set up the Authority within 6 months and finalise the DPR of Pancheshwar Development Project and begin implementation of the Project within one year.

• Directed the concerned authorities to conclude negotiations within 45 days on the Project Development Agreement (PDA) between the Investment Board of Nepal and GMR Group of India for the development of Upper Karnali hydropower project.

• Conclude negotiations on the agreement on trade in power sector within 45 days. Early conclusion of other three PDAs namely Arun III, Upper Marsyangdi and Tamakoshi III. They emphasized that development of projects of this size will be a major catalyst for the development of Nepal’s enormous hydropower potential.

• The Indian side assured to assist the construction of a multilane motorable bridge over Mahakali River at Mahendranagar, which will allow traffic along the East West Highway to cross over the Mahakali River and establish a vital trade and transit linkage of far western region of Nepal with Indian cities of Uttar Pradesh, Delhi and Uttarakhand. The Indian side also conveyed to consider construction of motorable bridges at the border points at Jhulaghat and Darchula.

• Nepal requested for assistance to complete the eastern sector of Mid Hill Highway, namely (Chiwabhanjyang-Ganeshchowk, 61 km, Jorsal-Tamor-Sankranti, 35 km, Sankranti-Myanglung, 68 km, Bhojpur-Diktel, 88 km, Haleshi-Hilepani 40 km, Ghurmi-Khurkot, 60 km). The Government of India agreed to consider the request positively.

• Ongoing defense cooperation. In this context, the Nepalese side requested the Prime Minister of India for waiver of the dues outstanding as on date owned by the Government of Nepal to the Government of India on account of defense purchases.

• Expedite the construction of Postal roads and feeder roads (Terai roads) and complete the phase I expeditiously. They also directed to commence phase II within a year. The Indian side agreed to consider the Government of Nepal’s request to implement the phase II projects by the Nepalese side.

• The revised Rail Service Agreement, Motor Vehicle Agreement, Letter of Exchanges on Trade and Transit and ratification of BIPPA.

• Cross border railway at all five agreed border points and the four Integrated Check Posts (ICPs) which cross border trade and transit as well as Nepal’s export to and import from third countries.

• Indian side agreed to take up the project for the construction of Raxaul-Amlekhgunj petroleum pipeline in the first phase and extend it to Kathmandu in the next phase to facilitate the transport of petroleum products.

• The Nepalese side highlighted the trade deficit it is facing vis a vis its trade with India and suggested measures to address this deficit through increased Indian FDI, relaxation of non-tariff measures including SPS standards for agro products, support in product
development, relaxation of Rules of Origin
requirement for duty free access of Nepalese products, and mutual recognition of standards, conformity assessment and accreditation.

• The Nepalese side stressed that the countervailing duty (CVD) being levied by the Indian authorities on Nepalese exports including readymade garments, copper, brass utensils, Kattha and other products have had negative impacts on key Nepalese exports to India and requested the Indian side to remove it.

• The Nepalese side also requested to remove Quantitative Restrictions (QRs) on the four Nepalese export products namely Vegetable fats, copper products, Acrylic Yarn and Zinc Oxide. The Indian side assured to consider the requests by the Nepalese side. The Indian side also reiterated that problem of trade deficit could be best bridged by development of hydropower in Nepal and export of surplus power to India.

• Importance of transit rights of Nepal, the two Prime Ministers agreed to take further measures in the spirit of the Treaty of Transit, to simplify transit procedures and facilitate expeditious movement of traffic in transit. Finalisation and implementation transhipment modalities at the earliest.

• The Nepalese side requested India to allow three additional air entry points at Janakpur, Bhairahawa and Nepalgunj, and cross border direct routes to facilitate direct flights between regional airports Pokhara-Bhirahawa-Lucknow as this would save time and cost for air travelers and also improve air connectivity between India and Nepal.

• The two Prime Ministers directed the concerned authorities to meet within 6 months and resolve this issue and similar issues pertaining to the Air Services Agreement.

• Development of cross border transmission lines as agreed in the Joint Commission.

• Rehabilitation of Koshi Pump Canal and Koshi Western Canal System and rehabilitation of West Gandak Canal System with a Lift System to irrigate additional Nepalese land. The Nepalese side will communicate the details of the projects.