India, Nepal sign 3 key pacts
India and Nepal sought to forge what had earlier been described by Nepalese Prime Minister Baburam Bhattarai as a “development partnership”, with the two sides signing three pacts, all of which are expected to help India’s neighbour move towards its developmental goals.
Apart from signing the crucial and long-awaited Bilateral Investment Promotion and Protection Agreement (BIPA) to help bilateral investments, the two sides also inked a pact under which New Delhi will be extending a $250 credit line for infrastructure projects to Kathmandu. The third pact will see India providing grant assistance worth `1,875 crore to Nepal’s for its goitre control programme.
Grappling with the on-going peace process and the framing of a new Constitution, Mr Bhattarai, who is the second Maoist PM of his country, can derive some satisfaction from this visit at least where his development agenda for his country is concerned. However, no power-sharing agreements were finalised as was expected. External affairs ministry officials said that it would take up to four years to provide the 200 MW of additional power being sought by Nepal owing to lack of grid connectivity.
While at least two of them, the long-awaited BIPA and Dollar Credit Line Agreement, were on the cards, the third one, too, is a continuation of assistance that India has been providing to Nepal since 1973. However, the amount to be provided under the new agreement is substantially more than what was provided between 1973 and 2010 — `41 crores.
The signing of this Dollar Credit Line Agreement, in fact, is a commitment that India had given to Nepal when its President, Dr Ram Baran Yadav, visited India in February last year.
The important BIPA is aimed at increasing bilateral investment flows and help remedy the trade imbalance between the two neighbours. Money provided under this is expected to fund infrastructure projects in Nepal, among them highways, airports, bridges, roads, railways, irrigation and hydropower projects. Under this agreement, both India and Nepal will have to “encourage and create favourable conditions for investors of the other country to make investments”.
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