The ever-increasing trade-deficit between India and Nepal over the past decade or more has left both the governments in a tumultuous situation. The high-level meeting between the authorities of the two countries on 8 and 9 February in Pokhara, Nepal, on the Indo-Nepal Trade Treaty is a reflection of the same. As mentioned by the Joint Secretary of the Ministry of Industry, Commerce and Supplies, Rabi Shankar Sainju, this meeting would make an attempt to seek several alternative ways of reducing the huge gap in the economic front and would reconsider the amendment of the several bilateral treaties that already exist.
Moreover, this is all the more important because some of the agreements that have lost their relevance in keeping with time and the newer intricacies and nuances that have developed in the region with regard to power dynamics in international relations and the necessary negotiations of Nepal with other big powers like China. While Sainju is leading a nine-member delegation, his Indian counterpart, Bhupinder Bhalla, is leading a seven-member Indian team, encompassing the Ministry of Foreign Affairs and the Department of Customs and Commerce as well.
Nepal and India always had a special trading relationship. Although the small Himalayan nation has had many advantageous takeaways from this situation, the ability to pursue an independent trade policy had been lacking for a very long time. This is primarily because of a kind of dependence. In recent times, the gap has been expressed in a ratio of around 1:10. This increase became more highlighted after the 1996 Treaty on Trade and Agreement of Cooperation to Control Unauthorised Trade because of the value additions made by India which consequently increased the trade costs for Nepal.
In such a circumstance, there has been a shift on part of the Nepali entrepreneurs from manufacturing to trading that tried to garner more export and combat the trade deficit that still exists. As per the recent information from the Customs department, Nepal has a trade deficit with around 112 countries and surplus with only 28 countries. This deficit has been amounting over Rs. 222.9 billion.
Indo-Nepal economic negotiations have always been free flowing until a formal treaty was signed in 1923, which came to be known as the Treaty of Perpetual Peace and Friendship. However, it was only after the landmark 1950 Treaty of Peace and Friendship signed between independent India and Nepal –with the subsequent signing of the Treaty of Trade and Commerce – that Nepal got the right to trade with other countries and also use the Indian territory for the transit of goods, itself being landlocked. However, the Treaty of Trade and Commerce was amended in 1961 and 1971 in order to invest further transit routes for Nepal, other than India.
In 2009 a fresh trade agreement between India and Nepal was signed along with the Bilateral Investment Protection and Promotion Agreement (BIPPA) and the Double Taxation Avoidance Agreement (DTAA) and the Treaty of Transit in 2015. This provided an official framework for enhancing Indian investment in Nepal and also tried to promote the integration of the two financial systems. Thereafter, the treaty was renewed again without any changes in 2016.
Many specialists are of the opinion that this treaty has always required an amendment for the sake of better and stronger bilateral trade. This opinion also mentions that the treaty is weaker than the South Asian Free Trade Agreement (SAFTA) in the front that where it prohibits imposition of duty on agricultural products, while this treaty allows duty on all such products.
Leaving China aside, India is the largest trading partner of Nepal. There are several industries in the area between Birgunj and Patlaiya which includes steel, pharmaceuticals, garments and carpet making units. Generally, the raw materials are sourced from India and the manufacturing is carried out in Nepal. Major Indian companies like Patanjali and Dabur are based here. However, there are several lacunas that are omnipresent.
Nepal does realise the need of Customs Coordination, standards authorization, electronic data interchange, cross border trade and transport agreements to facilitate trade. Similarly, other problems like Indian authority refusing to accept the quarantine tests carried out by the Nepali veterinarians, resulting in the halting of export of processed leather, has caused huge loss for Parsa-Bara industrial corridor. Again, restrictions on the export of paddy and seeds from India to Nepal at the beginning of 2016 had caused a lot of problems for the Nepali rice mills which are dependent on them.
With the passage of time, Nepal is moving closer to China due to the vibrant and newer scopes of development that are being offered by the country, including inland transit route and the usage of ports. This is mainly because of the One Belt One Road (OBOR) project under the Belt and Road Initiative (BRI).
India must take note of this situation, if it wants to maintain a healthy immediate neighbourhood in South Asia that does not move beyond its pursuit of influence. Thus, it is important to refurbish talks on the trade treaty so that there are no new bottlenecks in the trade relationship between the two countries, both brewing equal share of profit from each other and negating the trade deficit that is acting hard to be curbed out completely.
Sohini Nayak is a Research Assistant at Observer Research Foundation, Kolkata
With multiple polls staring at the Sri Lankan nation in the coming months, the electorally-sensitive minority ‘Tamil politics’ in the island-nation keeps hitting road-blocks and dead-ends, of their own making, time and again. With the result, the credibility of the mainstay Tamil National Alliance (TNA) may have hit a new low but without any viable alternative in sight.
The latest is the statement by former Northern Provincial Council (NPC) Chief Minister C V Wigneswaran, once belonging to the TNA but has since founded his own ‘Tamil People’s Party’ (TPP). Addressing a public meeting in NPC capital Jaffna recently, the former Supreme Court judge surprised his hard-line supporters as much as he ran down the TNA leadership of octogeneraian, R Sampanthan, when he declared that the LTTE had killed innocent Tamils and also Tamil intellectuals.
Wigneswaran’s anti-LTTE tirade, possibly the first one from him, may have deflected from his comparing the TNA with the unforgettable militant outfit. “Like the LTTE, the TNA wants to be accepted as the ‘sole representative’ of the Tamils,” he said. Needless to explain, Wigneswaran was underscoring at least his unwillingness to concede it, though there is truth in his allegation as far as the TNA’s unilateral moves and methods as far as politico-electoral decision-making is concerned.
Post-LTTE, a majority of the Tamil population had gravitated towards the TNA, both as the best of the available political alternatives and also as the inheritor to the pre-war moderate leadership of the community. They also invested their continued political aspirations on the party along with their unfulfilled constitutional aspirations, which the LTTE too had failed to obtain for them.
In walking the talk since the bloody end to the conclusive war in 2009, the TNA leadership, however, applied the same yardstick of faith on the majority Sinhala political leadership, this time of the ‘Government of National Unity’ (GNU). From the start, it was predictable that the GNU was bound to fail, and with that the confidence that the TNA had campaigned for the Tamil people to place in the anti-Rajapaksa leadership of duo – namely, President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe.
The failure of the GNU was predictable but with the government parties having adequate numbers since the parliamentary polls of August 2015, the TNA’s numerical strength in Parliament was not worth the paper on which it was written. Only the GNU split would render the TNA’s parliamentary backing relevant after the twin constitutional crises of late 2018, but then the party did not have a clear-cut strategy to hedge and make its demands work.
Now when the Wickremesinghe government has settled down in office, the PM’s UNP leadership is looking at re-creating another GNU. On the face of it, it is to consolidate the majority Sinhala support for the UNP-UNF, by creating more Cabinet berths under the 19th Amendment of the Constitution, passed in mid-2015. But one unmistakable fall-out for the Tamils is the lesser dependence of the Government on the TNA for continued survival, taking its bargaining-power down with the party.
On the ground, students of the Jaffna University observed the nation’s Independence Day on 4 February, as a ‘black day’. Traditionally, Jaffna campus has been the barometer for reading the mood and methods of the Tamil youth for decades. The added concern for the Government was that President Sirisena promptly cancelled a visit to the Northern Province around the time. Local media reports indicated that it may have owed to security concerns – possibly the first time since the end of the war and the exit of predecessor President Mahinda Rajapaksa in Elections-2015.
This time, the demands of the Jaffna students did not focus on political demands or constitutional reforms. Instead, they focused near-exclusively on the daily concerns of the ‘war victims’. This included freedom for ex-LTTE cadres and innocent Tamils in prison since before the end of the war, return of Tamil lands, still in possession of the armed forces, and the like.
Through the past five years, the TNA had more or less narrowed down the party’s demands to cover these areas. The promised new Constitution had for long become a subject matter of intellectual discourses in select media channels, but the ordinary Tamil people had got used to the idea of their political leadership’s conduct in such matters over decades.
This also meant that political parties and groups hoping for campus-support for their election campaign in the coming months could rake up both war-linked rehabilitation and also constitutional reforms at will, to target the TNA. On all scores, mostly, the party does not have convincing responses to offer the Tamil electorate.
For now, TNA’s international spokesman and parliamentarian, M A Sumanthiran, has sought to put the lid on the ‘kari day’ (‘black day’) controversy by saying that the protests did not evoke much response in the Tamil areas of the North. Typical of the TNA, he has sought to contrast it with TNA’s very own position on such matters, pointing out how Alliance leader Sampanthan participated in the Government’s official function in capital Colombo.
In contrast, not long after the war, the TNA had backed Jaffna University students who launched a unique protest by lighting traditional oil lamps on the LTTE’s ‘Heroes’ Day’. When the security forces swooped down on the protests, the TNA claimed that the Tamils had the right to remember their martyrs in a mass observance, in temples and public places.
As it turned out, that year, 2012, the LTTE’s Heroes’ Day on 27 November, coincided with the Tamil-Hindu ‘festival of lamps’, ‘Thiru Karthigai’ in the Tamil month of ‘Karthigai’. In other years, post-war, Tamils, including TNA leaders on occasions, have observed the day by planing saplings, indicating that ‘revolutionaries continue to be born and branch out’.
Still the TNA may be in an advantage in electoral terms, at least as far as the parliamentary and provincial council polls may be concerned. This is because over the decades, the non-TNA parties has not identified with any convincing ideology and methodology, even as much as the TNA has done. While TNA may have been weakend, as indicated by the nation-wide local government polls in February 2018, there is nothing to suggest that the non-TNA parties are ready to come together and work together. Personality egos might continue to haunt them all.
In comparison, the TNA continues to look up to Sampanthan for guidance and leadership in all matters, political and electoral. Yet, the party is no more its own post-war self, when it garnered Tamil votes at will. In the LG polls last year, the party’s vote-share came down to 35 per cent, and nothing seems to be working to the party’s favour – starting with its own short-term tactics and long-term strategies.
There is also the problem of the intervening presidential polls, which are due by this year-end. Over the past many elections, the Tamil votes, including the Tamil boycott of the 2015 polls under LTTE threat, was decisive in the choice of the nation’s President. The situation may have been so now on paper, but there is no guaranteed that the TNA would be able to ensure the delivery of most Tamil votes to the candidate of the leadership’s choice.
In turn, this could force the TNA itself to call for a boycott of the presidential polls, if only to salvage some of the lost reputation among the Tamil people, and also hope to retain most of the parliamentary seats from the Tamil regions in subsequent elections. Going by previous elections, any successful call for the boycott of the presidential polls by anti-TNA Tamil parties could render the latter’s support irrelevant – and take away from the party and the community the tag of being the ‘decision-maker’ and ‘game-changer’ in national politics.
Possibly smelling an opportunity of some kind, Mahinda Rajakapsa had a separate breakfast meeting with Tamil journalists in his Colombo home recently, and promised to deliver the post-war political solution to the ethnic issue by ‘engaging with the Tamil people directly’. He charged the TNA with breaking away from the productive talks with his Government post-war, hoping that they would get it from the leadershp of present-day PM Wickremesinghe.
Rajapaksa ruled that the new Constitution promised by Wickremesinghe to the TNA and Tamils was not going to happen anytime soon. He asked the TNA as to what would they tell their people – or, words to the effect. However, Rajapaksa, for his part, did not say what he meant by holding ‘direct talks with the Tamil people’.
For now, Rajapaksa said that he would go beyond the Thirteenth Amendment to give more powers to the Tamils, by conferring more powers on the Provinces and local governments alike, though there are grey areas where the Tamils especially had reservations in the past.
Reacting to Rajapaksa’s latest claims, which are mostly a repetition of the past statements, TNA’s Sampanthan has repeated his own self. News reports have since quoted him as saying that Rajapaksa ‘dodged’ the TNA in the post-war talks initiated by his Government. Granting the truth of Sampanthan’s claims, the TNA may now need to explain to their own Tamil constituency as to what has Ranil, and possibly Sirisena, too, did with their promise of a new Constitution, addressing the Tamil concerns, since before Elections-2015.
The writer is a Senior Fellow at Observer Research Foundation, Chennai
Speaking at a recent ceremony to review the performance of the Afghan Special Police Forces, Afghanistan President Mohammad Ashraf Ghani stated that anyone picking up arms against the Afghan government is an enemy and must be eliminated. He further eulogised to the gathering that peace is achieved by force and the Afghan security forces cannot beg for peace in the presence of armed forces. He explained Afghan forces are the guardian of the country’s dignity and status.
The US Special Representative for Afghanistan Reconciliation Ambassador Zalmay Khalilzad discarded the claims of an apparent timetable having been fixed for the withdrawal of US troops from Afghanistan. Reports had earlier emerged stating that the deputy chief of the political office of Taliban in Qatar Mawalavi Abdul Salam Hanafi had promised that half of US troops would withdraw from Afghanistan by the end of April. Khalilzad stated that no such orders have been given for withdrawal as yet.
The Spectator Index this week showed that Bangladesh ranks amongst the top in per capita economic growth. As per the index, Bangladesh stands equal to China and India, the two economic giant, in the highest per capita economic growth globally in the last five years. Bangladesh has recorded 45 percent per capita growth in the past five years in terms of purchasing power parity, which is similar to that of India and China. The Spectator is a British weekly magazine, focusing on politics, economics, history, military affairs, sports, science, and technology.
Indian Prime Minister Narendra Modi this week reiterated his country’s commitment to work with the newly formed government of Prime Minister Sheikh Hasina in strengthening the bilateral relationship with Bangladesh. The Indian Premier made the comment during the visit of Foreign Minister Abdul Momen to Delhi recently. It was his maiden visit abroad after being appointed as the Foreign Minister following the Awami League’s landslide victory in the 30 December election. During the visit, Momen also participated in the fifth consultative meeting between the foreign ministers of the two countries and reviewed the state of the bilateral relations.
Bangladesh’s Commerce Minister Tipu Munshi this week urged Bhutan to use the Syedpur Airport for better connectivity. Saidpur Airport is in Nilphamari district in the Rangpur division of northern Bangladesh. The minister said Bhutan’s use of the Airport could boost trade and tourism between the two countries. The minister made the request during his meeting with Sonam Rabgye, Bhutan’s Ambassador to Bangladesh, in his office in Dhaka.
Prime Minister Dr Lotay Tshering this week claimed that the government’s decision to provide free education for all up to class 12 did not violate the Constitution. Further, the Prime Minister opined that there was no question of constitutionality when the government was working towards enhancing free education opportunity beyond class X based on merit. According to the Bhutanese Constitution, the state should provide free education to all up to the tenth standard. Recently, the opposition claimed that the government’s decision to provide free education to all up to twelve could lead to breaching the provisions of the constitution.
The recent changes in India’s FDI policy sees e-commerce retailers such as Amazon and Flipkart take the biggest brunt. The new policy changes state that these platforms cannot prioritise the companies they are related to over third-party vendors when offering discounts or even when simply selling products. This has left companies such as Flipkart in the lurch, with mega corporations such as Walmart looking at a pullout of their investment into the Indian e-commerce platform. These rules were brought into force when the government, in its latest policy changes, specified these companies as simple platforms which help third party retailers to sell their products on their platforms, thus looking to give every retailer in the Indian market a fair share in the e-commerce market.
In his maiden address to the opening session of Parliament in the New Year, President Ibrahim Mohamed Solih highlighted the amendments submitted for a number of laws by his administration, as part of the ongoing efforts to rectify the constitutional framework. He recalled that a Bill has been submitted to the Majlis to criminalise unlawful acquisition of wealth, which has been designed by the Government to increase the penalties for senior State officials implicated in such cases. He reassured that his administration firmly abides by a policy of zero-tolerance to corruption. In context, President Solih said that the government is undertaking swift evaluation of 11 laws and regulations that had previously been amended for the purpose of political gain and to target Opposition politicians. He also said that 14 additional Bills have been submitted to the Majlis so far, of which 10 have been ratified, including the Bill on the Protection of Whistle-Blowers and the Legal Profession Bill proposing to establish a bar association. He called upon the Majlis to expedite the bills on misappropriation of state property and funds, and the investigation of unsolved murders.
In the aftermath of the Supreme Court upholding the High Court’s quashing of Election Commission refusing to accept the election of former President and half-brother Abdulla Yameen as the head of the Progressive Party of Maldives (PPM), party founder Maumoon Abdul Gayoom has approached the EC for registering his ‘Maumoon Reforms Movement’ (MRM) as a new political party ahead of the parliamentary polls of 6 April. Earlier, Yameen, anticipating a possible court decision to hand over the party to Gayoom, whom his leadership had sacked from the PPM in 2017, had his supporters register a new party. In an unrelated development, the High Court rejected the four Maumoon children’s appeal against a civil court order on a private complaint of non-payment by a builder, which flowed from their not appearing before the court when the case was posted for hearing.
Famed Hollywood Actor Angelina Jolie recently visited a camp in Cox’s Bazar. She said on 5 February that Myanmar must "show genuine commitment" to end violence that has driven hundreds of thousands of Rohingya Muslims into neighbouring Bangladesh. The visit came ahead of a new UN appeal to raise nearly one billion dollars for the one million Rohingya now in the camps around the town of Cox's Bazar. She stated that the responsibility to make it possible for the Rohingya people to return to Rakhine state and to ensure their rights lies squarely with the government and the authorities in Myanmar.
Over 7000 Kachin people gathered in Manaw Park to denounce attempts by China and others to restart the Myitsone project, which has been mothballed since 2011 when strong opposition from residents forced its cancellation. The protesters said that 90 percent of the electricity that will be produced by the dam will be exported to China and will not benefit the country. The demonstration came as a protest towards a recent statement by the Chinese embassy in Myanmar that most Kachin people support the project and only a few non-governmental organisations and political parties oppose it.
The leaders of the Nepal Communist Party (NCP) have remained divided over the plans to dissolve the high level unification taskforce. This situation emerged after the failure to finalise the merger of the lower committees and sister wings within a stipulated time. Without such grass-root level unification, it seems to be impossible to curate a holistically successful party.
In order to generate more money from the migrant workers abroad, a government task force has suggested reduction in the cost of remitting money to Nepal. This is applicable to the banks or the remittance companies for encouraging the workers to utilize the formal channels. In this regard, signing of labour agreements with the host countries has also been put forward.
Pakistan Information Minister Fawad Chaudhury recently opined that the country’s defence budget was low compared to other regional states including India and therefore must be increased. The Pakistani government has thus decided not to make any further cuts in the country’s defence budget and plans to increase it though generation of more revenue so as to bolster the country’s defence and security. Chaudhury further mentioned that the Pakistani government and army were enjoying a “period of unprecedented coordination.”
Pakistan and India have confirmed the venue for talks on the Kartarpur Corridor Accord so that modalities can be finalised to facilitate the pilgrims. Both countries have agreed in principle on reciprocal visits of officials for negotiating and finalising the agreement. In that regard, a Pakistani delegation is scheduled to visit New Delhi on 13 March for initiating the process. The follow-up meeting after this will be held in Pakistan
Pakistan in a subtle warning to Afghanistan recently stated that Afghan President Ashraf Ghani’s tweet expressing concern over “violence perpetrated against peaceful protestors....in Khyber-Pakhtunkhwa and Baluschistan” can severely undermine the ongoing reconciliations. Apparently, the tweet referred to the protest by the Pashtun Tahafuz Movement in which one activist was killed in a scuffle with the police. This diplomatic row comes just as Pakistan had begun facilitating direct negotiations between the US government and the Afghan Taliban.
Inaugurating ‘The Hindu Huddle’ in Bengaluru, former Sri Lankan President Mahinda Rajapaksa called for sustained ties with the Indian neighbour, and recalled how the two nations had created the Troika consultation mechanism to cut red-tape and fast-track bilateral decision-making. He also recalled his declaration that India was a ‘relation’ to Sri Lanka while all others were ‘friends’, and pointed to patches in the past when bilateral ties nose-dived. In particular, he referred to 2014, when the ties got strained ahead of his defeat in the presidential polls of January 2015.
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Afghanistan & Pakistan: Sohini Bose
Bangladesh: Joyeeta Bhattacharjee
Bhutan: Mihir Bhonsale
India: Ameya Kelkar
Maldives & Sri Lanka: N Sathiya Moorthy
Myanmar: Sreeparna Banerjee
Nepal: Sohini Nayak
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