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Hon. Surendra Pandey

Hon. Surendrea Pandey
 

 

MP-IDSA-AIDIA Joint-Webinar on COVID-19 and India-Nepal Relations, 22 May 2020.

 

Excellency Ambassador ShriSujan R Chimoy, Director General and Chairman of Manohar Parrikar Institute for Defence Studies and Analyses (MP-IDSA), 

Shri Sunil KC, CEO/Founder, Asian Institute of Diplomacy and International Affairs (AIDIA),

Honourable MPs, Excellencies, distinguished guest speakers, and all participants of this webinar zoom meeting on “Webinar on COVID-19 and Nepal India Relations”,

First of all, I would like to thank MP-IDSA/AIDIA for organizing this discussion program. Both Nepal and India have not remained unaffected by COVID-19 that has distrupted the whole world. I believe that this interaction program organized in this crucial moment will be fruitful in resolving these issues.

COVID-19 which first appeared in Wuhan, China on 31st December 2019 was first seen in Nepal on 23rd January 2020 in a Nepali student returning from Wuhan. It was then seen in Nepalese returning from Europe via the Middle East in the last week of March. The first week of April saw more cases as the Indian and Nepali nationals coming from India were positively diagnosed. On 14th May 2020, Nepal saw the first death due to COVID-19 when a woman who had just given birth to a child died. There have been two more deaths since and the total number of infected people has reached 487.

The Government of Nepal imposed a nationwide lockdown on 24th March 2020 and halted all domestic and international flights. It suspended public transports, industries, schools, government offices and all non-essential activities. Although it has also restricted the movement of people, enforcing it has been especially challenging in the Southern part of Nepal due to its open border with India, where both Nepali and Indian nationals are ignoring the lockdown to move across the border.In the recent days, the infection has been on the rise among the Nepalis returning from India and COVID-19 has also spread to the community level. As Nepalis who have reached the Nepal-India border are denied entry into Nepal, the number of Nepalis entering Nepal secretly has increased. This has resulted in the increase of COVID-19 infections not only among the returnees but also in their communities. Instead of denying entry to Nepalis returning from India at the border, the Government of Nepal should regulate their entry to Nepal via designated entry points, quarantine them and send them back to their homes after a certain period of time. The Government of Nepal should initiate the repatriation of Nepalis living in India wishing to return home with the coordination, management and assistance of the Nepali Embassy in India, together with the cooperation from the Government of India. The Government of Nepal should also support the Indian Government's efforts to repatriate Indian nationals from Nepal. The governments of both countries need to provide the necessary facilities and help desks in order to make it easier for people living in Nepal and India to return to their home countries.

As far as economy is concerned, COVID-19 has caused a major crisis in the world economy this year. The International Monetary Fund (IMF) recently projected a 3 percent contraction in the world economy, a 5.9 percent contraction in the US economy and zero percent growth in Asia. Naturally, COVID-19 has already negatively impacted and will further impact both the Nepali and Indian economies as well. According to the latest statistics of Nepal, the economic growth target of the current fiscal year 2019/20 has shrunk from 8.5 percent to about 2 percent. The revenue target is expected to be dropped from Rs 1 trillion 112 billion to Rs 750 billion. There is a risk of a significant decline in remittances and the loss of nearly 3 million jobs in domestic and foreign employment. The number of Nepalis returning to Nepal after losing their jobs abroad is expected to be very large. This number will grow even larger if we take into account the Nepalis returning from India.

Nepal's agriculture, tourism (especially hotels and restaurants), transport, aviation and construction sectors have suffered the most due to the COVID-19 pandemic. Furthermore, the private sectors have already declared their inability to pay the principal and interest of the bank and the wages of their workers. This could lead to the wage workers falling into a vicious cycle of hunger and poverty, and increase the social unrest and protest in the society.

During and beyond the COVID-19 crisis, the cooperation and coordination between Nepal and India will play an important role in recovering the economies and improving the health services that have been badly harmed. It is important to note that although Nepal is largely dependent on imports, the trade deficit between Nepal and India is increasing every year. The statistics of the last fiscal year (2018/19) shows Nepal's trade deficit with India to be Rs. 855 billion. There might be several dimensions to reduce the trade deficit of this magnitude and both countries should make efforts to reduce it. 

Despite the service flow from Calcutta and Visakhapatnam ports of India improving significantly compared to the past, the exports to India from Nepal have been far from easy.

The annual demand for vegetable ghee in India is estimated to be 8 million metric tons while Nepal's export capacity is limited to only 300 to 400 thousand metric tons. Still, Nepal has not been able to export its vegetable ghee for the past 3-4 months due to the quantitative restriction imposed by India. The export of Nepali tea to India has also come to a standstill due to India’s decision to allow imports to Nepal while restricting Nepal’s exports through Kakadvitta customs checkpoint of eastern Nepal. As the export of tealeaves has stopped, the traders have stopped buying the leaves from the tea farmers and the farmers have been forced to leave their tealeaves to rot in the gardens. This has put the tea farmers at extreme stress and serious financial risks.

Similarly, restriction imposed by the Indian Government is also hindering Nepal’s jute industry. Nepal’s jute industry produces jute sacks, jute bags and other jute materials by purchasing raw jute from the Nepali and Indian jute farmers in the border areas of eastern Nepal. But for the past 3-4 years, the Indian Government has used the AntiDumping and Counter-Vailing Provision to block the export of Nepali jute products. As a result, Nepal’s jute farmers and jute industries have been confronted with a serious crisis.

Bulk cargo (rail service) that operates for the import of industrial raw materials from Calcutta and Visakhapatnam in India to Birgunj in Nepal is a very positive provision for our industries. It has greatly helped our industrial sector to import raw materials. But such provisions are not yet available in the industrial corridors of Biratnagar, Bhairahawa and Nepalgunj in the west. Furthermore, the heavy truck drivers who transport Nepali imports to Nepal have been complaining for a long time about the difficulties they are facing due to the poor quality of roads in the 20 to 50 km stretch of road connecting the Indian highways to Nepal's border areas. There has been no work done in the ICP that was supposed to be constructed in Bhairahawa and Nepalgunj. I hope that the Government of India and the concerned Indian authorities will soon pay due attention to remove these obstacles and start improving and constructing the necessary infrastructures so that the problems mentioned can be resolved soon.

Recently, the dispute over the Nepal-India border, especially in the areas of Limpiyadhura, Lipulek and Kalapani has hightened. This problem should be solved through friendly discussions and dialogue. Head-to-head talks should be held between the Prime Ministers and political leaders of the two countries. The embassies of the two countries should play a proactive role. The border dispute between India and Bangladesh was resolved in 2016 on the initiative of Indian Prime Minister Modi. The border dispute between Nepal and India should be and can be resolved by assimilating that experience. Nepal's ruling party, the Communist Party of Nepal (CPN), and India’s ruling party, Bharatiya Janata Party (BJP), should intensify discussions and dialogue at the leadership level, at the government level and at the grassroots level. Both Nepal and India need to take special initiatives to resolve any issues between Nepal and India.

Thank you.