-  India - Nepal Relations
-  India - Nepal Trade and Economic Relations
-  Economic Co-operation
-  Welfare Activities for Indian Armed Forces Ex-Servicemen of Nepal
-  Indo - Nepal Cooperation in the   Educational Field
-  BP Koirala Foundation

India - Nepal : Political

Relations between India and Nepal have been shaped by long-standing geographical, historical, cultural, social and economic ties that the peoples of the two countries have shared with each other in all walks of life. An open border of more than 1,800 km epitomizes this special relationship which also manifests in the close and friendly relations at the governmental level, reinforced by cooperation and regular consultations, notwithstanding political changes.
Under the India-Nepal Treaty of Peace and Friendship of 1950, both governments have undertaken, in token of the neighbourly friendship between India and Nepal, to give to the nationals of the other national treatment in its territory with regard to participation in industrial and economic development and to the grant of concessions and contracts relating to such development.  The nationals of India and Nepal are also granted, on a reciprocal basis, in the territories of the other the same privileges in the matter of residence, ownership of property, participation in trade and commerce, movement and other privileges of a similar nature. This Treaty has enabled Nepal and Nepalese to be 'land-linked' with India, rather than land-locked, and facilitated sharing of opportunities in pursuit of peace and progress.

During the visit of the Hon'ble Prime Minister of Nepal H. E. Shri Pushpa Kamal Dahal 'Prachanda' to India from 14-18 September 2008 both sides noted that the multi-faceted and deep-rooted relationships between the two countries needed further consolidation and expansion in a forward-looking manner to better reflect the current realities.  It was in this broader context that the two Prime Ministers agreed to review, adjust and update the 1950 Treaty of Peace and Friendship and other agreements, while giving due recognition to the special features of the bilateral relationship. A High-Level Committee at the level of Foreign Secretaries is being set up for this purpose.

Support to Nepal's Peace Process

Nepal turned a new leaf in its history with Janandolan-II in April 2006. As the people of Nepal took their destiny in their own hands and prepared to lay down the contours of their future system of governance through an elected Constituent Assembly, India responded to Nepal’s needs with utmost urgency. The visit of Prime Minister G.P. Koirala to India one month after the restoration of multi-party democracy in Nepal saw India extend a comprehensive package of assistance to help Nepal tide over immediate financial needs and support peace, democracy and stability. Assistance under ‘Aid to Nepal’ was trebled to NRs. 1.5 billion annually. The direct budgetary support (NRs. 1.6 billion) was the first by India to any country. A soft credit line of USD 100 million for infrastructure development projects was extended, and outstanding dues on defence purchases worth NRs. 1.6 billion waived.

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India- Nepal Trade and Economic  Relations

India is Nepal’s largest trade partner and source of foreign investment; India is also the major transit providing country for Nepal.

(a)       Trends in trade and investment

(i)         Bilateral Trade

Bilateral trade was US$ 2.28 billion during Nepalese fiscal year 2005-06 (begins on July 16). Nepal’s import from India amounted to US$ 1652.16 million and exports to India aggregated US$ 627.82 million with India. During fiscal year 2006-07, Nepal’s total trade with India was about US$ 2.46 billion; Nepal’s exports to India were about US$ 645.71 million; and imports from India were about US$ 1.81 billion. While exports to India increased by about 2.8%, its exports to the rest of the world declined by 0.9%; its imports from India grew by 9.9%, while imports from rest of the world grew by 10.3%.

There has been strong growth in bilateral trade since the revised Trade Treaty was signed in 1996. Since the revision of India-Nepal trade treaty in 1996, Nepal’s exports to India have grown over 8 times and total bilateral trade has grown over 5 times. Over 96% of increase in Nepal’s total exports worldwide since 1996 has been on account of India.

This period has also seen an increase in India’s share in Nepal’s foreign trade. During the early 1970s, India absorbed almost all of Nepal’s exports and accounted for nearly 90% of Nepal’s imports. However, India’s share in Nepal’s foreign trade dropped below 30% by mid-1990s. Since the 1996 Treaty, India’s share in Nepal’s export has grown from 18.5% in 1995-96 to 68.9% by July 2007. India’s share in Nepal’s imports has also reached nearly 61.4% by July 2007, from 32.8% in 1995-96. Today, India accounts for nearly two-third of Nepal’s foreign trade.

Nepal’s main imports from India are petroleum products (29%), motor vehicles and spare parts (8.3%), M. S. Billet (4%), medicines (4%), machinery and spares (3%), cement, and chemicals. Nepal’s export basket to India mainly comprises vanaspati (10%), and range of other semi-processed and processed food products. Other major exports include toiletries, twines, pulses, sacks, polyester yarn, cardamoms, readymade garments, etc. Steel strips and sheets, processed from raw material imported from India, are also emerging as major exports from Nepal to India.

Indian firms are the biggest investors in Nepal, accounting for about 44% of total approved foreign direct investment of IRs 22.5 billion (a little over US $ 346 million) and also for 28.2% of 1281 operating ventures with foreign investment. China is the second largest investor with 12% share in cumulative investments and Japan is third with 10% share.

These trends are summarised below:

          Trade with India: NRs in Million (US$ million)

          Nepalese financial year (July 16 - July 15)

          Growth in trade with India (in %)

(ii)        Investment

Indian ventures in Nepal are found in manufacturing, services (banking and insurance) and tourism industries. UTL, a consortium of VSNL, TCIL and MTNL, together with a Nepali partner is the first private sector player in the telecommunication sector in Nepal. Other large Indian investors include Dabur, ITC, Hindustan Lever, CONCOR, SBI, PNB, LIC, Oriental Insurance, Asian Paints, and Colgate-Palmolive. The prevailing picture about investment by Indian ventures in Nepal is summarized below:

Indian Investments in Nepal: NRs in Million

Nepal’s transit trade is routed through the port of Kolkatta/Haldia and fifteen designated transit routes between Kolkatta and India-Nepal border. In addition, Nepalese trade traffic to Bangladesh also transits through India. 

(b)       Bilateral Framework

The bilateral framework for trade and transit is provided by the India-Nepal Treaties of Trade, of Transit, and Agreement for Co-operation to Control Unauthorised Trade 1991. The Trade Treaty valid for five years was renewed through an exchange of letters on December 3, 1996 and March 5, 2002 and automatically renewed for another five years in March 2007. Under the Treaty of Trade, India provides, on a non-reciprocal basis, duty free access, to the Indian market for all Nepalese-manufactured articles barring a short negative list (cigarettes, alcohol and cosmetics), subject to the conditions, since March 2002, that the exports meet the domestic value addition requirement of 30% and change in HS classification at the four-digit level in the course of manufacture or processing in Nepal. After the March 2002 revision, annual quotas have been prescribed for duty-free exports to India for four sensitive items - vegetable fats (100,000 tonnes) acrylic yarn (10,000 tonnes), copper products(10,000 tonnes) and zinc oxide (2,500 tonnes).

Bilateral trade takes place generally in Indian rupees, but Nepal's central bank maintains a list of items that can be imported from India in dollars. Currently, there are about 100 items on the list. Indian rupee is legal tender in Nepal and is freely convertible. The exchange rate has been maintained at NRs. 1.6 per Indian rupee.

India and Nepal have also negotiated a bilateral cooperation agreement on standards between Bureau of Indian Standards and Nepal Bureau of Standards and Meteorology.

The India-Nepal Treaty of Transit, renewed every seven years, provides for port facilities to Nepal at Kolkatta and specifies 15 transit routes between Kolkatta and the India-Nepal border. As requested by the Nepalese side, a separate Customs Cell at Haldia has become operational from 16 August 2004. For bilateral trade, 22 entry/exit points are provided along the Indo- Nepal border. The Transit Treaty was last renewed in March 2006. The Agreement for Cooperation between India and Nepal to Control Unauthorised Trade was automatically renewed for five years in March 2007.

The two governments are negotiating a Bilateral Investment Protection and Promotion Agreement. The two countries already have a double taxation avoidance agreement since 1987.

India and Nepal signed a Rail Services Agreement in May 2004, to extend cargo train service to the Inland Container Depot (ICD) at Birgunj in Nepal. ICD has been constructed with World Bank Assistance of US$ 17 million, while India has constructed the rail tracks which link the ICD with the Raxaul railway station in India. The ICD became operational on 16 July 2004. A Container Corporation of India-led joint venture Himalayan Terminal Private Ltd. is operating the ICD.

A Motor Vehicles Agreement for passenger vehicles, initialled on 23 February 2004 awaits formal signature. The agreement envisages bus services between India and Nepal on 14 routes through 5 border points on reciprocal basis. 53 buses will operate under this agreement everyday. Individuals travelling to either country in their personal vehicles would also be able to cross over into the other country without payment of any charge for the first five days.

In accordance with the provisions of the bilateral Air Services Agreement signed in 1997, in addition to Indian Airlines and Nepal Airlines Corporation, private airlines from the two countries have been designated to provide air services between the two countries. Jet Airways and Jet Lite (Air Sahara) from the Indian side and Cosmic Air from the Nepalese side also operate air services between the two countries.

Government of India is committed to improving cross-border trade related infrastructure. These include upgrading the four major custom checkpoints at Birgunj-Raxaul, Biratnagar-Jogbani, Bhairahawa-Sunauli and Nepalgunj-Rupediya to international standards; building an oil pipeline between Raxaul and Amlekhgunj, through a joint venture between Indian Oil Corporation and Nepal Oil Corporation; upgrading approach highways to the border on the Indian side; upgrading and expanding the road network on the Nepalese side; and, broad gauging and extending rail links to Nepal. An Inter-Governmental Committee on Trade, headed by Commerce Secretaries, meets every year to consider policy, regulatory and infrastructure issues in India-Nepal trade.

(c)       India – Nepal Co-operation in Water Resources:

Rivers flowing from Nepal into India constitute an important part of the Ganges River System. They are a major source of irrigation in the Gangatic plains but also of devastating floods in north Bihar and Uttar Pradesh. Nepal’s enormous hydropower potential, estimated at 83,000 MW, of which 44,000 MW is considered economically feasible, could transform Nepal’s economy. There is enormous scope to augment Nepal's current about 600 MW installed hydropower generation capacity for meeting Nepal's own growing needs and earning valuable foreign exchange.

Bilateral cooperation is aimed at mutual benefits in the areas of irrigation, flood control and power generation. However, after a promising start with the Kosi and Gandak projects between independent India and Nepal, there has been little progress in bilateral cooperation for harnessing the rivers for hydropower and irrigation. Indian assistance helped create about 20% of Nepal’s irrigation potential and over 10% of its installed hydropower capacity (through 3 small projects, besides power from Kosi and Gandak).

India’s decision to fund the INR 30 crore rehabilitation project for Devighat HEP, offer to provide financial support for the 250 MW Naumure Storage Power Project in Nepal, Government of Nepal’s decision to utilise the USD 100 million line of credit from Government of India for the construction of the 27 MW Rahughat HEP and to part-finance the construction of four high voltage cross-border transmission lines on the Nepalese territory represent further Indian assistance for the development of Nepal’s water resources.

Cooperation for flood control and management has also made modest progress. In addition, the two governments engage on issues relating to cross-border inundation problems that result from creation of local-level assets in border regions, such as embankments, diversion schemes, etc. During the visit of Hon'ble Prime Minister of Nepal H. E. Shri Pushpa Kamal Dahal to India from 14-18 September 2008, both sides expressed concern over the large-scale damage caused by the breach of embankment by the river in the Kosi barrage area and decided to launch relief and rehabilitation measures for the victims and the reconstruction of the damaged infrastructure, and other measures as per the agreements, immediately, and take up preventive measures to avoid the recurrence of such events in the long term.  They decided to take up preventive measures for the Gandak and other barrages under existing bilateral arrangements. They also discussed the problem of inundation in the border areas between Nepal and India and agreed to take up necessary work for its effective prevention on the basis of bilateral consultation. The Government of India decided to provide Rs. 20 crores as immediate flood relief to the people in Nepal and rebuild the segments of the East-West Highway, damaged in the August 2008 Kosi floods. 

In accordance with the agreement reached during the visit, Government of India set up a camp office in Biratnagar on 23 September 2008 for facilitating movement of Nepali vehicular traffic through Bihar for improved access to other parts of Nepal till the Highway is repaired.

Institutional structure for cooperation:

The two sides have wide-ranging dialogue architecture for discussion and cooperation on water resources. Joint Committee on Water Resources (JCWR), set up at prime ministerial initiative of the two countries in March 2000 as the apex bilateral organ for cooperation in this sphere, had its first meeting in October 2000 and the second in October 2004. It is chaired by Water Resources Secretaries of the two countries.

During the visit of the Prime Minister of Nepal to India in September 2008, it was decided to set up a three-tier mechanism at the level of Ministers, Secretaries and technical experts to rationalize and raise the efficacy of the existing bilateral mechanisms in order to push forward discussions on the development of water resources in a comprehensive manner, including hydro-power generation, irrigation, flood control and other water related cooperation. As per the decision taken by the two Prime Ministers, JCWR met in Kathmandu from 29 September - 1 October 2008. (Please click here to view the relevant press release.)

The two sides also have a Standing Committee on Inundation Problem (SCIP), a short-term High Level Consultation Committee (HLTC) for two specific inundation problems, a Standing Committee on Embankment Construction (SCEC), Standing Committee on Flood Forecasting (CFF), Committee on Flood Management and Control and a Joint Group of Experts for Pancheshwar, a Joint Team of Experts on Sapta Kosi-Sun Kosi Project, a Power Exchange Committee, and a Joint Committee on Kosi and Gandak Projects. The JCWR, set up as prime ministerial initiative of the two countries in March 2000, had its first meeting in October 2000 and the second one in October 2004. Other forums have met at regular intervals.

Major Multipurpose Projects:

There are currently two major multipurpose projects (encompassing power, irrigation and flood control) on the agenda of the two countries.

(i)                     Pancheshwar Multipurpose Project: The 1996 Mahakali Treaty between Indiaand Nepal provides for the implementation of the Pancheshwar Multipurpose Project. The project, conceived as a peaking power project, will have 5600 MW of installed capacity and create irrigation potential for 130,000 hectares in Nepal and 240,000 hectares in India. The Detailed Project Report (DPR), to be prepared jointly by the two countries, has not been finalised, since certain issues remain pending. The two countries are pursuing their dialogue through the Joint Group of Experts on Pancheshwar.

(ii)                    Sapta Kosi-Sun Kosi Multipurpose Project: The project, located in Nepal,involves a high storage dam on Kosi River; 3000 MW power plant; a barrage downstream to feed irrigation canals in Nepal and India; a diversion structure on Sun Kosi River to channelise water through a tunnel into Kamala River; a small dam on Kamala River with a powerhouse of 50 MW and barrage downstream for irrigation purposes. The project is designed to provide flood control, power, irrigation and navigational benefits to both countries. India and Nepal opened the Joint Project Office for Sapta Kosi-Sun Kosi Investigations in Biratnagar on 16 August 2004 to prepare the joint DPR for the project. Government of India is providing about Rs. 70 crores as grant for the work of the JPO. This project, if implemented, will provide flood control benefit to Nepal and India, create power capacity of 3000 MW and irrigate 1.0 million hectares in India and 0.5 million hectares in Nepal.

Hydropower generation and trading:

There is considerable scope for mutually beneficial cooperation between India and Nepal in developing small and medium sized hydropower projects in Nepal for internal use in Nepal or exports to India. Nepal's hydropower development policy permits private and foreign investment in generation of hydropower, including for exports.

In what constitutes a significant new development, Power Trading Corporation has signed a Power Purchase Agreement with an Australian company (Snowy Mountain Engineering Corporation), which is developing a 750 MW West Seti Hydro Power Project in Nepal. Nepal has several other small and medium sized project proposals that can be developed by the private sector, including companies in India.

A Power Trade Agreement was signed in the presence of the two Prime Ministers in June 1997. This Agreement was to promote private sector participation in the field of power infrastructure. In addition, power exchange takes place in areas contiguous to the border between the two countries on the basis of decisions taken by the Power Exchange Committee. Currently, 50 MW of power is exchanged between the two countries, with Nepal being a net importer of power. Under the Mahakali Treaty, India also supplies 70 million units of power annually free of charge to Nepal.

On the sidelines of the Power Summit 2008, a Memorandum of Understanding for supply of additional 60 MW of electricity by Power Trading Corporation of India Ltd (PTC) to Nepal Electricity Authority (NEA) was signed on 24th September 2008.

Flood Forecasting and Control:

There are ongoing discussions between India and Nepal in respect of flood forecasting and prevention. The two sides are cooperating since 1989 on flood forecasting and warning through data collection and transmission from 42 sites along rivers in Nepal. Government of India has provided equipment to Nepal to collect hydrological and meteorological data from a number of sites in Nepal for the purpose of flood forecasting. The bilateral Committee on Flood Forecasting, set up during the October 2000 JCWR meeting, prepared a Comprehensive Flood Forecasting Master Plan (CFFMP), which was adopted by the JCWR in October 2004. The Committee has now been entrusted with the task of implementing the plan. Key features of the revised plan includes expansion of the number of stations from 42 to 47, upgrading and modernisation of five key sites and real time data transmission from key sites in Nepal.

In October 2004, the JCWR also established a Joint Committee to prepare a longterm and comprehensive plan on flood management and control. Given the severity of floods in Nepal and Bihar in recent years, the Joint Committee's immediate focus is to identify short-term measures for flood management and control.

To control floods in north Bihar and adjoining Nepalese territory from four rivers – Lalbakeya, Bagmati, Kamala and Khando – Government of India has sponsored a scheme of raising, strengthening and extending the embankments along these rivers in Bihar and is also providing assistance for constructing embankments along certain stretches of these rivers in Nepal. Pursued through the Sub-Committee on Embankment Construction (SCEC), the phase I of project has been completed on Lalbakeya river, is in progress on Bagmati River and is being planned for the Kamala and Khando rivers.

Economic Co-operation

INDIA-NEPAL ECONOMIC COOPERATION PROGRAMME

BACKGROUND

From the beginning, the core philosophy of India’s development assistance programme in Nepal is based on India’s belief that the welfare of the people of these two countries is interlinked. Guided by this philosophy, soon after independence in 1947, India strongly supported Nepal’s desire for transformation into a modern and welfare state. India, itself a developing country and with its limited resources, started contributing significantly towards the development infrastructure and human resources in Nepal, with the programme of cooperation launched in 1951. Some of the first projects which opened Nepal to the rest of the world were executed with the Indian assistance. For the first two Five Year Plans of Nepal, India was the only foreign country involved in Nepal's development.

The objective of this programme had been and remains to supplement the efforts of the Government of Nepal in Nepal’s national development.

To give a concrete shape to this vision of development cooperation, Government of India set up the Indian Aid Mission in Kathmandu in 1954, which was later renamed as the Indian Cooperation Mission (ICM) in 1966 and remained functional till the 1980s. The change in the nomenclature was to reflect the fact that India’s association with the economic development of Nepal was more in nature of cooperation than merely financial assistance. The ICM, with its more than 80 staff, devoted exclusively to implementing Indian-assisted mega development projects in Nepal. Later, the ICM was recast as the Economic Cooperation Wing of the Embassy of India, which continues to carry forward the development assistance to Nepal with the same zeal as under the ICM.

CURRENT PROGRAMMES

India’s economic assistance to Nepal has grown manifold in the past two-three years, particularly since the restoration of multiparty democracy in Nepal, and our economic cooperation engagement with Nepal has emerged as one of the most important elements of India-Nepal relations. In overall terms, there are presently over 290 small and large projects being undertaken under the India-Nepal Economic Cooperation Programme, with a committed outlay of over Indian Rs. 14 billion. The relevance and importance of our economic assistance in Nepal is particularly enhanced today as Nepal steps into a new era of democracy, peace and development.

SMALL DEVELOPMENT PROJECTS

One of the current hallmarks of India’s developmental engagement with Nepal is the success of the Small Development Projects (SDP) programme, which focuses on social and physical infrastructure in the sectors of education, health and community development, and is being implemented since 2003 under a bilateral agreement between the Governments of India and Nepal. The SDPs, which are community-owned and executed by the local agencies of Government of Nepal, emerged from the diversification of India’s economic assistance programme from the earlier exclusive attention to large infrastructure projects to grassroots programme, which could reach out to the beneficiaries directly, efficiently and promptly without the complexities of inter-governmental negotiations involved in big projects. The methodology is simple and straight forward for these projects with little or no overhead costs and 100% of project funding reaching the beneficiary. These grassroots projects have proved immensely useful in supplementing the local developmental efforts of the Government of Nepal through a well devised community-oriented, transparent and participative programme. Its imprint now covers almost the entire Nepal, with over 220 SDP projects valued at approximately Indian Rs. 240 crores.

MEGA PROJECTS FOR CROSS-BORDER CONNECTIVITY

With a view to facilitating greater cross-border exchanges and bringing about qualitative transformation in cross-border connectivity between India and Nepal, a number of mega infrastructure projects also form an important part of India’s economic assistance portfolio in Nepal. Creation of Integrated Check Posts at the four border check points on the Indo-Nepal border (Raxaul-Birgunj, Jogbani-Biratnagar, Bhairahwa-Sunauli, Nepalgunj Road-Nepalgunj) is one of the most important endeavours for achieving this objective that has been agreed upon between the two governments. It envisages world-class infrastructure at these border points for smooth flow of people and goods across the border. In addition, Government of India is also undertaking projects for development of over 1500 km of road network in Nepal's Terai region that would provide easy access between the Indo-Nepal border areas and Nepal’s East-West Highway. A link road connecting Mahendranagar in Nepal’s far-west with Tanakpur in India will extend the connectivity beyond Nepal’s East-West Highway into India. Similarly, a project presently on anvil for cross-border rail links at five locations at the Indo-Nepal border (Jalpaiguri-Kakarbhitta, Jogbani-Biratnagar, Jaynagar-Bardibas, Nautanwa-Bhairahwa, Nepalgunj Road-Nepalgunj) will significantly boost cross-border linkage and will be of immense value in promoting trade and commerce between the two countries. All these are high value projects and likely to cost a few thousand crores of Indian rupees.

OTHER LARGE AND INTERMEDIATE PROJECTS

Among other large and intermediate-size projects presently being implemented under the India-Nepal Economic Cooperation Programme include the construction and faculty support for BP Koirala Institute of Health Sciences, Dharan (cost: IRs. 120 crores); 200-bed Emergency and Trauma Centre at Bir Hospital, Kathmandu (tentative cost: IRs. 80 crores); Manmohan Memorial Polytechnic at Biratnagar (tentative cost: IRs. 25 crores); 100-bed Nepal Bharat Maitri Bakhtawari Hari Eye Hospital at Krishnanagar, Kapilvastu (tentative cost: IRs. 10 crores); Science Learning Centre at Kathmandu (tentative cost: IRs. 10 crores); Polytechnic at Hetauda (tentative cost: IRs. 22 crores); Dharmashala at Pashupati Temple Complex (tentative cost: IRs. 10 crores); development of 22 Farmers’ Managed Deep Tube Well Irrigation Systems in Jhapa, Sunsari, Saptari and Siraha districts in Eastern Terai (tentative cost: IRs. 4 crores).

WELFARE SCHEMES FOR EX-SERVICEMEN

For the welfare of ex-servicemen and GOI pensioners living in Nepal, which now number over 122,000, Government of India implements a number of welfare schemes every year under the India-Nepal Economic Cooperation Programme. These include drinking water projects, medicine pack scheme, solar electrification projects in remote areas etc.

TRAINING INITIATIVES

Training programme for the Nepalese government officials has been recently launched as a new dimension of India’s economic cooperation engagement with Nepal. Under this, training-cum-exposure visits to India for Local Development Officers from almost all districts of Nepal, along with a group of Finance Officers, has been successfully organised. The programme has so far also included a study visit in December 2007 by a high-level delegation from the Public Service Commission of Nepal to study India’s reservation policy in recruitment. More such training proposals for various levels of Nepalese officials are in pipeline, which we believe will further strengthen awareness of each others’ systems and reinforce the friendly, professional and close relations that characterize the interaction between the civil servants of the two countries.  

ASSISTANCE TO NEPAL’S PEACE PROCESS

As part of the economic assistance programme, Government of India has responded with greatest earnestness to the needs of the people and the Government of Nepal in facilitating the peace process and meeting other specific requirements following the Janandolan-II in April 2006. During the visit of Prime Minister Koirala in June 2006, India announced trebling its development assistance to Nepal during 2006-07 under the ‘Aid to Nepal’ programme. Both sides also agreed to expedite progress on long-term mega infrastructure projects in Nepal in the areas of roads, railway linkages, border infrastructure, water resources, construction of an oil pipeline, special economic zone, airports upgradation, and other areas to be mutually agreed upon by the two Governments. A number of other support measures were announced and implemented during that visit, including, 

• Direct budgetary assistance of IRs. one billion to GON;
• Soft credit line of US$ 100 million for infrastructure development projects as prioritized by GON;
• Waiver of outstanding dues on defence purchases (more than IRs. one billion);
• Doubling the number of GOI scholarships for Nepalese students to 2000;
• Supply of 25,000 metric tons of fertilizers to Nepal at subsidized prices;

Government of India welcomed the roadmap laid down by the historic Comprehensive Peace Agreement of November 2006 towards political stabilization in Nepal through peaceful reconciliation and inclusive democratic processes, and has consistently responded with a sense of urgency to the needs of the people and Government of Nepal in ensuring the success of the peace process, of which the Constituent Assembly elections are an important and inalienable part. To this end, a number of specific assistance totaling over IRs. 75 crores has been provided in response to requests from the Government of Nepal. These include,

• Supply commitment of over 1200 vehicles and 14,000 wireless sets  to the Nepal Police, a large of which has already been delivered;
• Supply of over 80 vehicles and 50 wireless sets to the UN Mission in Nepal;
• Supply of 70 containers for storage of arms being managed under UN supervision;
• Supply of 6800 metric tons of food material and 4000 tents for rehabilitation of internally displaced persons;
• Supporting the electoral process with close interaction between the Election Commissions of India and Nepal; supply of equipment to the Election Commission of Nepal, such as Electronic Voting Machines (200), computers, vehicles (75); training, sharing of experiences of Indian elections, etc.;

India remains steadfast in its commitment to extend assistance for Nepal’s economic rehabilitation and political stabilization. India holds that while there is an urgent need to hold the elections to the Constituent Assembly in Nepal in a free and fair manner, it is equally critical to ensure that economic deliverables, particularly in the areas of education, health and infrastructure, reach people without any pre-conditions in a smooth, quick and unencumbered manner. India’s assistance programme in Nepal is guided by this vision. The existing developmental engagement stands to be further strengthened with the ushering in of a new era of hope and peace in Nepal.

PowerPoint Presentation on India’s development assistance to Nepal

Reference Map of economic cooperation projects with Government of India assistance in Nepal

Booklet 'Being Together Growing Together' (pdf version)

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Welfare Activities for Indian Armed Forces  Ex-Servicemen of Nepal

1.  India has always been proud to have Nepalese as soldiers in her Defence Forces and has made every effort to ensure that they are looked after and cared for in their twilight years.

2. As of now, we have over 80,000 ex-servicemen residing in Nepal.  The Government of India has made every effort to ensure that these ex-servicemen, their families and dependants are looked after in the best possible manner.  To ensure this, the Government of India has established “The India Ex Servicemen Welfare Organisation in Nepal (IEWON)” functioning within the Embassy of India under the chairmanship of none other than HE Shri Deb Mukharji, Ambassador of India to Nepal.

3. Welfare of ex-servicemen is undertaken in the remotest areas of Nepal where our brave ex-servicemen settle down to leading a quiet and contended retired life.  It has been our endeavour to reach out to them wherever they may have chosen to reside.  To this effect, we have District Soldier Boards (DSBs) functioning in various locations in Nepal, from Baitadi in the West to Ilam in the East.  Senior ex-servicemen who act as our representatives and means for us to reach out and extend welfare schemes to those ex-servicemen in need, man the DSBs.  For purposes of pension, we have apart from Kathmandu, two pension paying offices functioning at Pokhara and Dharan.

4. Our welfare activities can be broadly listed in the succeeding heads.

5. Medical Facilities.  It has been endeavour to provide medical facilities to ex-servicemen within Nepal.  Each ex-servicemen is provided with a medicine pack once a year containing essential basic medicines with directions for usage.  A sum of rupees 70 lacs is expended on this account annually.  For the next stage of his medical treatment, we have two Medical Inspection Rooms at Pokhara and Dharan, each manned by a male and lady doctor.  These facilities are fully equipped with X-Ray, Lab, ECG and such like facilities.  At Kathmandu we are in he process of making a MI Room functional.  Presently the Indian embassy doctor visits this MI Room and provides free treatment to the ex-servicemen.   For cases where specialist treatment is required, 13 Indian Army Medical Welfare Teams visit Pokhara, Dharan and various DSBs each year.  These teams consist of Eye, Dental and Medical specialists.  A sum of Rs 90 lacs  is expended on making these specialist teams available for our ex-servicemen in Nepal.

6. Hundreds of cataract operations are performed, dentures made and spectacles issued to ex-servicemen  and their dependants.  In addition, the ex-servicemen can visit Army Hospital in India for free treatment.

7. We have also introduced a scheme for eligible ex-servicemen wherein, by joining the Extended Medical Benefit Scheme, they are given financial assistance upto 1.6 lakh.  This assistance covers illness such as Heat Diseases, Cancer, Renal Transplant/Dialysis & Limb Replacement which includes the pensioner and his spouse.

8. Drinking Water Projects.  The aim of the Drinking Water Project Scheme is to provide water to village where the ex-servicemen population is large.  All stores such as HDP pipes, CGI sheets and cement are provided for construction.  Stores are transported by us to the road head nearest to the village from where it is further carried by the ex-servicemen themselves.  The villagers through voluntary service also subsequently execute the project on ground.

9.  So far 877 water projects have been implemented in various remote areas of Nepal.  During the current year a sum of Rupees 1.6 crores has been expended on 64 Drinking Water Projects.

10. Educational Scholarships   To assist the ex-servicemen in educating their children, scholarships are provided at the rate of 400.00 for children upto class 4th, Rs 750.00 for children upto class 8th, and Rs 1200.00 for children beyond class 8th and upto graduate level studies.  Each year a sum of Rs eight lac is disbursed on this account.   For those wards of ex-servicemen who undertake professional studies such as MBBS, BE, MBA, CA, LLM, MSc, MEd, MA both in India and Nepal, special scholarships in addition to complete tuition fees, cost of books etc is provided.  We have now decided to include computer as a subject in higher Education.  As of now we have two students studying  MBBS, eight undergoing BE, and one MA studies.

11. Scholarships to Wards of Those Killed in Action.  This is given to wards of those ex-servicemen who died in 1962, 1965,1971 operations and OP PAWAN, OP VIJAY and OP MEGHDOOT.  The Scholarship package includes complete tuition fees, boarding and lodging charge, school bus charges, books and stationery charges, cost of uniform and clothing etc is         re-imbursed on an annual basis by Army HQ.   As of now 183 students are in receipt of this scholarships.  Last year we disbursed NRs 55 lac on this scheme.

 12. Financial Assistance to Schools.  This is being provided to schools where the majority of children are wards of ex-servicemen.  Assistance is provided for expansion and repair of existing school building, purchase of furniture, books, sports equipment's etc.  A sum of Rs eight lac is expended on this account annually.

13. Vocational Training Schools.  Wards of ex-servicemen themselves are trained in vocations in order to enhance their opportunities for employment, business etc.  The courses conducted include stitching, knitting, typing (English & Nepali), English Language and   computer training.  The most popular of these courses is of course training on computers which is run at Kathmandu, Pokhara and Dharan.  We have recently introduced computer training at DSB Butwal and DSB Gulmi also.  At our DSBs, we run stitching and knitting classes.

14. Co-operative Stores. The ex-servicemen in Nepal had a long outstanding demand of being provided with CSD facilities as is applicable to their counterparts in India.  We have contacted local factories in Nepal like Nepal lever Ltd, Nepal Batteries, Salt Trading Corporation and other companies producing stores required by our ex-servicemen. These factories have agreed to supply their items at factory rates and thus we have CSDs now functioning at Kathmandu, Pokhara and Dharan.   These stores are also being taken to various Pension Paying Camps and have proved to be popular.

15. National Defence Fund Package for NOKs of soldiers killed in action and Disabled Soldiers  during various operations   Government of India has   announced the following amounts for NOKs of those soldiers killed in action and also for those who were disabled during various operations since 1947 :-

(a)     Rs 1,60,000.00 NC  -   Soldiers disabled and invalided out from the Army with disability element
(b)     Rs 80,000.00 NC     -   For NOKs of Battle Casualties

Money from 14 GTC, 39 GTC, 58 GTC and 11 GRRC has been received and affected personnel are being paid the grant.

16. Benefits from Army Central Welfare Fund Ex-servicemen whose economic condition is very poor are being given financial assistance from Army Central Welfare Fund.  The rates are as   under  :-

(a)             For JCOs             -             6,400.00 NC
(b)             For OR                -             4,800.00 NC

Apart from the above, funeral grant 3,200.00 NC is also being paid to NOK of an ex-servicemen in the event of his death with effect from 01 Apr 2000.

17. NDF Package for NOKs of OP VIJAY Casualties  The following benefits of NDF have been received from Army HQ, New Delhi for NOKs of OP VIJAY casualties.

(a)         Ex Gratia in lieu of grant from State Govt   -      8 lac NC

(b)         Grant for Dwelling Units                           -      8 lac NC            

(c)         Financial Assistance to Parents               -      1.92 lac NC

(c)         Education Assistance to children             -       1.6 lac NC per child

 (Max 3.2 lac NC)

These grants have been disbursed/ being disbursed as per SOP laid down by AG's Branch, Army HQ. Regimental Centres are responsible for sending the above amounts in respect of affected cases. Total number of OP VIJAY cases of Nepal domicile is 20

Latest Additions to Welfare Measures

18. Welfare Project Buses. We have procured 04 buses (one each at Kathmandu and Dharan and two buses at PPO Pokhara) for subsidised conveyance of ex-servicemen from various places to Pension Paying Offices and back.

19. Nepal Bharat Maitri Vidhyalaya .This  is a long outstanding demand of our ex-servicemen in Nepal i.e. to have our own school at Pokhara.  A new school building is proposed to be constructed within our PPO complex.Till such time the new building comes up, the JCOs Accommodation is being converted to a school and the school will start functioning soon, initially as a primary school, to be subsequently upgraded once funds are made available.  We have received Rs 30 lacs from Adjutant General's Branch as a one time corpus for the said school.

20. Teachers Training   A sum of Rs 5 lac has been deposited as corpus in India and the interest accrued is being utilised for providing scholarships to wards of ex-servicemen undergoing courses like BEd and MEd.

21.  It has been our resolve to remain close to our ex-servicemen in Nepal and reassure him that he has not been forgotten.It is our end endeavour to keep our BHU PUUs smiling and happy.

PENSION PAYMENTS IN NEPAL

1.Historical Background.   Prior to Independence in 1947 ex-servicemen and their families were drawing pension from border treasuries in India.  After India's independence the responsibility of pension payments was taken over by the Indian Embassy.  The first Military Attaché posted in 1949 took over the responsibilities thereafter.  In 1950, some 300 disabled ex-servicemen drawing their pension from Pokhara Mal Adda (equivalent our District Treasury) petitioned the Ambassador that they had not received their pensions for the last two years.  The Military Attaché was tasked to set up a temporary camp at Pokhara so that these ex-servicemen could get their dues.  Thus, the concept of pension payment camps in the interior areas came into being as it ensured timely payment of pension near the homes of the pensioner saving him money and time.

2. Pension Camps. Initially, temporary pension camps were established at Pokhara in 1955 and Dhankuta in 1959.These were converted into permanent pension paying offices in 1960.The Dhankuta camp that shifted to Dharan in 1968 has finally been relocated in a new office complex, which was inaugurated by the Ambassador of India.  Presently the Embassy conducts 32 Seasonal Pension Paying Camps annually, in the interiors of Nepal, for the convenience of ex-servicemen.Some of these camps are in remote areas, which entail travel by trek for days especially in the Eastern sector.

                                                                Pension Payments

3.Pension is distributed to all ex-servicemen their widows and children of ex-servicemen.  The Military Pension Branch of the Embassy of India is responsible for payment of pension and other dues to the Nepalese ex-servicemen and their families residing in Nepal.  The Military Pension Branch alongwith its offices at Pokhara and Dharan are today catering for more than one lac eight thousand Defence and Civil Pensioners who have opted to draw their pensions in Nepal.  Apart from pension payment our offices during these camps ensure that all requirements of the pensions in terms of Medical, Educational Scholarships, Army Group Insurance claims etc are all dealt under the concept of single window service thereby obviating the need for the pensioners to report at different places.

4.  We have in the last five years disbursed the following amounts as pension :-

            (a)             1994-95         - Rs 175 crore IC

            (b)             1995-96         - Rs 199 crore IC

            (c)             1996-97         - Rs 249.5 crore IC

            (d)             1997-98         - Rs 206.07 crore IC

            (e)             1998-99         - Rs 297 crore IC

            (f)              1999-2000     - Rs 370.6 crores IC

Indo - Nepal   Cooperation in the Education Field
Embassy of India Kathmandu

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The B P Koirala India - Nepal Foundation (BPKF) was established in December, 1991. The BPKF was instituted by the two Governments during the visit of the Prime Minister, G.P. Koirala (B.P. Koirala's youngest brother) through a Memorandum of Understanding between His Majesty's Government of Nepal and the Government of the Republic of India.

2.Bishweswar Prasad Koirala, after whose name the Foundation is established, is the symbol of Nepali renaissance. His ideas and vision made him a unique mixture of liberalism, humanism and social justice. He was a crusader against all forms of injustices perpetrated in various forms and through various agencies state and non-state. He occupies a unique place in politics, literature and intellectual thinking process making him a statesman - politician. B.P. had the distinction of being the first elected Prime Minister, following his party's overwhelming victory in the 1959 general election. Democratic system was terminated through extra-systemic means in 1960, but B.P.'s image as a symbol of democracy further increased until his death in 1982. B.P.'s involvement in the Indian Nationalist Movement and its impact on his political thinking process made him a close friend of India.

3. The Foundation is financed through revenues generated from a Trust Fund which has been set up principally through grants made available by His Majesty's Government of Nepal and the Government of India. The Foundation also accepts unconditional grants from other agencies, both public and private.

Objective

4. The BPKF has been set up:

Activities

The thrust areas of activities identified for promoting understanding and cooperation are:

·         Education and Culture

·         Agricultural Research

·         Science and Technology

·         Health

·         Technical Training

·         Development Studies

·         Women's Development

·         Area Studie

The Foundation extends financial support for higher studies, research and other educational activities and in-service training, visits and exchanges of scholars, writers, politicians, media-persons, administrators, businessmen and other professionals in various fields.

Structure of the Foundation

The BPKF is managed by a ten member Board of Directors headed by the two Co-Chairpersons. The Ambassador of India to Nepal and the Royal Nepalese Ambassador to India are the Co-Chairpersons of the Board. Other members of the Board are nominated by the two Governments from amongst the distinguished persons in their respective fields, while the two Joint Secretaries in-charge of their respective Foreign Officers of India and Nepal desks and two officials of respective Embassies are designated to act jointly as Secretaries of the Foundation.

The Board manages, supervises and controls the affairs of the Foundation. It meets twice a year to consider various proposals and projects received by the Foundation, and sanctions funds. Towards meeting the stated objectives, individuals, institutions or groups can approach the Foundation for consideration of their proposals through prescribed format made available in Foundation offices in Delhi and Kathmandu.

B.P. Koirala India - Nepal Foundation

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