India hopes to build on its relationship with Nepal, at a time of China's rising influence over the Himalayan nation.
He's already offered Nepal one-billion dollars in loans to help build power plants and roads.
Presenter: Sen Lam
Speaker: Dr Iftekhar Ahmed Chowdhury, principal research fellow at the Institute of South Asian Studies, National University of Singapore.
CHOWDHURY: Well, it is important, of course, and Nepal in particular and the region in general, its foreign policy appears to have three concentric circles, first the region, second the emerging economies and the third, the more distant , but also relevant Americas and Europe.
There is no pecking order really, but he's let it known that the region comes first and within the region, of course, Nepal is an important component.
LAM: Indeed, and, of course, Mr Modi I understand is interested in promoting his initiative of economically integrating South Asia. What sort of support might he find in Nepal?
CHOWDHURY: Well, his relations with Nepal or rather India's relations with Nepal have been fraught with some complexities. India has been seen to be slow to deliver on promises made, as on the Mahakali River treaty. Simply put, India is interested in water from Nepal and Nepal is interested in selling hydropower, the potential for which Nepal has not been able to tap fully. So these differing priorities will require some balancing, as Mr Narendra Modi will have to do with the rest of South Asia. So he is attempting to take the low hanging fruits first, Nepal being one of them. It's intricate, and as you have rightly said he's offered one billion dollars as credit and that is to support highways, infoways and transways. He is also fighting for space in Nepal with China, but this has to be done with a lot of deftness and dexterity, because China and India are also cooperating on another plane.
LAM: And, of course, Nepal, as you put it, is a low hanging fruit, but all this is against a backdrop of Nepali fears that joint ventures with India might led to a loss of sovereignty. How problematic might this be
CHOWDHURY: Well, this could be problematic, unless it's carefully handled. But Mr Modi also addressed the parliament yesterday and was the first foreign leader to do so and one of the things he said was that there will be no interference in Nepal's sovereignty. Of course, the proof of the pudding is in the eating, but as of now, the right kind of things are being said and it is, as far Mr Modi is concerned, so far, so good.
LAM: And, as you pointed out earlier. China has been increasing its presence in Nepal, such as hydro-power development. Has India been negligent in engaging its near neighbour, particularly previous Indian governments?
CHOWDHURY: Well, it wouldn't be correct to put it in that stark manner, but the fact remains that, for instance, with Nepal, relations have largely been conducted at bureaucratic levels earlier. Modi has raised it to the highest political level and he has made it a part of his overall foreign policy. So a good beginning has been made, but there are other important interlocutors in South Asia, there is Pakistan, there is Bangladesh, there is Sri Lanka, slightly more different ones and I think he's approaching step-by-step. He started with Bhutan, now it's Nepal and then I suppose it will spread around a little further.
LAM: And, Nepal may fit well into India's as you put it concentric circle pattern of foreign policy. But what should Nepal be extracting from India, in return for a closer relationship?
CHOWDHURY: Well, what Nepal is interested is in selling, in hydropower and getting India to support its hydropower project. There are huge potentials in Nepal and they have not been able to be developed and Nepal is also going to have to do some tricky balancing acts between China and India. Now, of course, Nepal is not new to it. This has gone on for decades on end. But now it's more complex, because at one level China and India are cooperating, at another level, they are competing. So there is going to be some interesting tai chi around competition and cooperation.