Nepal and India on Thursday undertook a comprehensive review of the status of bilateral ties and discussed a wide range of issues of mutual concern during the seventh meeting of Nepal-India Joint Commission held in Kathmandu.

Foreign Minister NP Saud and his Indian counterpart S Jaishankar co-chaired the meeting, where the two sides discussed trade and economic relations, land, rail, and air connectivity projects, cooperation in defence and security, agriculture, energy, power, water resources, disaster management, tourism, civil aviation, people-to-people and cultural exchanges and development partnership, Jaishankar said in X, formerly Twitter.

The joint commission is the highest-level political mechanism formed to discuss bilateral relations.

In the meeting, Nepal and India inked several agreements and understandings, where India announced a fresh grant of Rs10 billion for Nepal’s reconstruction bid following the November 3 earthquake in western Nepal.

According to Amrit Rai, spokesman at the Ministry of Foreign Affairs, India agreed on Rs10 billion financial aid to Nepal for reconstruction efforts in Jajarkot and Rukum West districts, which were devastated by the November 3 earthquakes.

Earlier, after the 2015 Gorkha earthquake, India had announced a $1 billion assistance including grant and loan for Nepal’s reconstruction.

But the assistance of Rs10 billion announced on Thursday is new and entirely grant, said officials.

Out of the earlier $1 billion, 25 percent was grant and the remaining 75 percent soft loan which would be spent on mutually agreed reconstruction projects, but that sum has not entirely materialised.

They also formalised a long-term power trade deal, with a goal of exporting 10,000 megawatts to India within the next ten years.

According to Sandeep Kumar Dev, joint secretary at the Ministry of Energy, this 25-year deal, under which 10,000 megawatts will be exported to India in the first 10 years, will be automatically renewed every 10 years after the first 25 years. “It paves the way for medium- and long-term power purchase agreements of up to five to ten years,” he said.

Secretary at the Ministry of Energy, Water Resources and Irrigation Gopal Sigdel and Indian Energy Secretary Pankaj Agarwal signed a memorandum of understanding on the deal during a meeting at the Yak and Yeti Hotel in Kathmandu. The energy deal was among the four agreements signed on Thursday.

Elated with the agreement, Prime Minister Pushpa Kamal Dahal said that January 4, 2023 was a milestone in energy trading for Nepal.

Speaking at a function in Ramechhap district after meeting Jaishankar in Kathmandu, Dahal said that an agreement on 10,000MW of energy trading in ten years is a milestone and a quantum leap for Nepal.

“During my India visit, we had reached an agreement to sell energy to India and this was formalised during the visit of the Indian foreign minister. This is a historic achievement,” the prime minister said. “Not only with India, this agreement has also paved the way for energy trading with Bangladesh. Now we will trade energy with Bangladesh via the Indian grid.”

Another agreement concerns an increase in Indian aid for small development projects in Nepal. As of now, India has been providing Rs50 million each to execute small development projects. Now the budget has been increased to Rs200 million, according to the agreement. This small development grant will be offered through government organisations and any other organisations, reads the agreement. Initially it was called ‘small grant or development projects,’ but was recently renamed High-impact Community Development Projects (HICDPs).

Initially launched in November 2003, the Indian Embassy extended economic assistance to various projects at the local level, including schools, colleges, and hospital buildings under the scheme.

As per the agreement, the local bodies or other government entities can request such projects through the Ministry of Federal Affairs and Local Development. After examining the requests, the Local Development Ministry will forward them to the Ministry of Finance. Then the finance ministry will ask the government of India to execute these projects based on priority, according to the finance ministry.

If the demand for projects comes through non-governmental organisations, relevant ministries like health, local development or education should recommend them to the Ministry of Finance for approval by the Social Welfare Council.

Each local unit has to set up a counter fund to execute the projects that receive funds under the HICDPs scheme. A separate monitoring mechanism has been constituted among the government entities and Indian Embassy in Kathmandu. The term of the agreement will remain valid for five years.

Meanwhile, a group of rights activists and former bureaucrats have criticised the agreement reached between the two countries in a statement. They termed the energy deal a problematic one.

“We find the decision to guarantee 10,000 MW of Nepal's hydroelectricity for the Indian market problematic, as this also affects Nepal’s flexibility in relation to stored water as a natural resource,” the statement read.

The statement, issued immediately after the signing of the bilateral agreement, is signed by former chief commissioner of the Commission for Investigation of Abuse of Authority Surya Nath Upadhyay, former commissioner of National Human Rights Commission Sushil Pyakurel, journalist Kanak Mani Dixit, Dr Renu Adhikari and Hira Bishwakarma.

“Because hydropower is not just a tradeable commodity but also intrinsically linked to the use of water as a resource, we demand that decisions be reached only through wide national discussion and parliamentary oversight,” the statement further read.

Both Saud and Jaishankar also witnessed an agreement between Nepal Academy of Science and Technology (NAST) and New Space India Limited (NSIL) for the Launch Services for Munal satellite on India’s Polar Satellite Launch Vehicle (PSLV). The agreement was reached between the Nepal Academy of Science and Technology and New Space India Limited under the Indian Space Research Organization (ISRO).

Despite India’s request, Nepali side had raised the issue of boundary disputes and sought its early resolution through the relevant mechanism.

“The issue of receiving the report of the Eminent Persons’ Group on Nepal-India relations did not figure at the meeting,” a Nepali participant said. “But Nepal raised the boundary issue.”

The issue of EPG did not figure during Prime Minister Dahal’s visit to India last year either.

The two ministers expressed satisfaction over mutual support in the regional, sub-regional and multilateral forums on the issues of common interests, said a statement issued by the Ministry of Foreign Affairs. It also mentioned additional air entry routes and floods and inundation as issues discussed in the meeting.

“Views were also exchanged on the review of the Treaty of Peace and Friendship of 1950, security and boundary-related matters,” read the statement.

The meeting discussed works being carried out by the boundary working group (BWG), which was mandated to clear the no-man’s land, repair and maintain boundary pillars and install new ones where they have gone missing. The Indian side said that it is building two bridges in western Nepal.

Indian officials did not commit anything about providing an air entry route to Nepal to help facilitate the operation of two international airports in Pokhara and Bhairahawa, the participant said.

Some other cross-border projects and infrastructure-related projects like extending the Indian rail up to Biratnagar cargo yard, forwarding comments on the proposed Raxaul-Kathmandu railway, timely construction of the two integrated check posts in Chandani and Dodhara were also discussed.

There was also no progress on finalising the detailed project report of Pancheshwar Multipurpose Project, according to the Nepali participant.

Later in the evening, Jaishankar met a team of Nepali cricketers and officials of the Cricket Association of Nepal and assured them of all possible cooperation in overall development of Nepali cricket. Nepali officials had requested Jaishankar to support construction of a cricket stadium of international standards.

“Congratulated them on qualifying for the T20 World Cup,” Jaishankar wrote on X. “Assured them of India’s support in their preparations. Underlined our commitment to the growth of cricket in Nepal.”

During the joint commission meeting, the Nepali side also raised the issue of delay in implementing India-funded projects on loans extended by the Exim Bank of India. Due to some conditions set at the time of negotiations, the projects funded by India are getting delayed, said the member of the Nepali delegation. “The Indian foreign minister was positive about reviewing the conditions set by the lender, the Exim Bank of India.”

Over a dozen projects, mainly roads, are under construction with funds from the Exim Bank.

Similarly, a memorandum of understanding for cooperation in renewable energy was signed by the Nepal Electricity Authority and National Thermal Power Corporation (NTPC) Limited, India.

The two foreign ministers jointly inaugurated three cross-border transmission lines—Raxaul-Parwanipur transmission line connecting with Bihar state of India, Kushaha-Kataiya transmission line, and Nautanwa-Mainahia transmission line connecting with Uttar Pradesh, India.

India also handed over the fifth tranche of post-Jajarkot earthquake relief supplies to the Nepali side.

The Joint Commission appreciated the achievements made in all areas of bilateral cooperation during the period following the 6th meeting of the Joint Commission held in January 2021, said the statement issued by India’s Ministry of External Affairs late Thursday.

The two ministers also witnessed the handover of the fifth tranche of post-Jajarkot earthquake relief supplies provided by the government of India to the government of Nepal, consisting of 200 prefabricated houses, 1200 blankets, 150 tents and 2000 sleeping bags for the earthquake affected people in Nepal, said the Indian statement, out of the 200 prefabricated houses, 20 were handed over today and the remaining shall be handed over in various tranches over the next few weeks.

Jaishankar meets leaders

Before taking part in the meeting, Jaishankar paid a courtesy call on President Ramchandra Paudel and Prime Minister Dahal. “I conveyed warm greetings of Indian President Droupadi Murmu to Paudel that ‘His guidance and spirit are inspiring for a strong and comprehensive India-Nepal relationship,’” Jaishankar wrote on X.

President Paudel told Jaishankar that Nepal and India should work together in the field of connectivity, mitigating the effect of climate change, development of hydropower, saving the Himalayas and water resources, among others, according to the president's office.

Later Jaishankar met Prime Minister Dahal at the Prime Minister’s Office in Singha Durbar.

“Recalled his successful visit to India in June 2023 which has imparted a new momentum to our ties,” Jaishankar wrote on X after meeting Dahal. “Discussed the follow-up, including through the Joint Commission Meeting today.”

India-Nepal friendship is indeed unique and our partnership is moving from strength to strength, the Indian foreign minister said.

Later he called on Nepali Congress chief Sher Bahadur Deuba where they discussed economic partnership between Nepal and India, according to the party’s chief secretary Krishna Prasad Poudel.

Deuba also lauded the long-term energy deal signed between the two countries and urged Jaishankar to increase Indian economic cooperation in Nepal’s infrastructure development.

In response, according to Poudel, Jaishankar said that India is aware of Nepal’s needs and requirements and ready to extend all possible cooperation in Nepal’s infrastructure development. “The objective of my visit is to give momentum to our bilateral relations and play a positive role in expanding cultural and religious ties between the two countries.”

Similarly, Jaishankar held talks with CPN-UML chair KP Oli and discussed the current state of bilateral relations. Jaishankar told Oli that he came to attend the joint commission meeting and had a productive and successful meeting, according to Rajan Bhattarai, head of the UML’s foreign relations department.

Oli told Jaishankar that no one can alter the multifaceted ties between Nepal and India which have been built over centuries.

“If we have issues then we have to discuss them and resolve them, but we want to take advantage of the economic development of both India and China. Both India and China are on course to achieve economic progress like they did before the pandemic, but we are struggling for momentum,” Oli said, asking Jaishankar to extend support as per Nepal’s needs, priorities and requirements and within the ambit of budgetary channels.

Jaishankar also met with former prime minister Madhav Kumar Nepal, and leaders of Madhesh-based political parties including Mahantha Thakur, Upendra Yadav and CK Raut in the evening.