India has pledged to spend $250 million for earthquake reconstruction in Nepal and signed agreements to build transportation and power projects, as the two countries move to reset frayed ties during a visit to India by Nepalese Prime Minister Khadga Prasad Oli.
After meeting his Indian counterpart in New Delhi on Saturday, the Nepalese leader said it is time to look ahead.
“The misunderstandings which persisted in the last few months is no longer there. It is high time that we look at India-Nepal relations with a forward-looking approach,” Oli said at a news conference.
Tensions had grown in recent months as the picketing of a key transit point on the Indo-Nepal border by Nepal’s ethnic minorities led to crippling shortages of essential supplies in the landlocked country.
Nepalese leaders accused India, which has close ties to the minorities, of imposing an economic blockade, and turned to China for critical supplies such as fuel.
The protests were called off earlier this month, somewhat easing the tensions. But the downward spiral in ties raised concerns in India that its tiny Himalayan neighbor was moving closer to China.
As Oli visited India, both leaders underlined having close links between the two countries.
Indian Prime Minister Narendra Modi said the two countries will expand cooperation in key areas.
“India always wanted peace, stability and prosperity of Nepal and it will extend all possible help to ensure its all-round development,” the Indian leader said.
India will build 50,000 houses in Nepal, which was devastated by an earthquake last April, and also assist in health and education projects in districts flattened by the killer quake.
The two prime ministers also inaugurated a transmission line to supply Indian electricity to Nepal under an Indian credit line of $13.5 million.
Modi said the success of Nepal’s new democratic constitution will depend on consensus and dialogue.
India has been leaning on Kathmandu to address the grievances of its ethnic minorities, which complain they do not have adequate political representation in Nepal’s new charter. That has created resentment among Nepalese leaders, who see it as interference in their affairs.
But Indian analysts said New Delhi does not want to see political turmoil close to its borders.
At the same time, political observers said it is important for India to maintain friendly ties with a country wedged between China and India in the high Himalayas.
Pointing out that China has been wooing Nepal with aid and investment, Jayadeva Ranade, of New Delhi’s Center of China Analysis and Strategy, said Kathmandu has moved closer to Beijing in recent years.
Ranade said India is wary of this because “India would not like Chinese influence to come right up to our doorstep. In effect that would mean the entire Indo-Himalayan belt and that is a matter of concern to us."