LPG brings India-Nepal ties back on rails

The wrinkles in Indo-Nepalese relations in the wake of Nepal being assiduously wooed and feted by China are all set to be smoothened out to some extent with India renewing its fuel sale deal with the Himalayan neighbour for another five years. Following threats by Nepal to source its cooking gas from China thereby undermining India’s exclusivity since 1974, New Delhi rushed in to placate its neighbour by promising to meet its entire domestic demand for petro products. There indeed was little point in acting tough when tact and diplomacy could bring dividends and restore a measure of balance in bilateral ties. India will also assist in implementing a cooking gas for poor scheme akin to Prime Minister Narendra Modi’s Ujjwala scheme in India, besides building storage facilities for the Nepalese. The two prime ministerial visits to India from Nepal in 2016 subsequent to tensions in ties a year before over Kathmandu’s new Constitution also helped cool the atmosphere. As per the agreement signed here by Indian Oil Corporation and Nepal Oil Corporation in the presence of oil minister Dharmendra Pradhan and Nepal’s minister for supplies Deepak Bohara, the Indian company will supply about 1.3 million tonnes of fuel every year for the next five years.

India has been supplying fuel to Nepal since 1974 under contracts that were periodically renewed. The renewed deal will cover petrol, diesel, kerosene, jet fuel and liquefied petroleum gas (LPG).Besides, in keeping with Modi’s promise in 2014 in an address to the Nepal Parliament, India has renewed its commitment to build the Raxaul-Amlekhganj petroleum product pipeline, for which work is expected to start in 2017-18. While the investments will be made by Nepal, Indian Oil would provide technical assistance. Fuel supplies from India were temporarily disrupted in 2015 when protestors blocked the main transit point on the border. Indian Oil then used alternative entry points to supply fuel to Nepal. Nepal also signed a fuel purchase deal with China, but the route between the nations presented logistic challenges. After gifting fuel during the alleged six-month economic blockade against Nepal by India that began in September 2015, China was attempting to gain a toehold by offering to become an alternate supplier. Nepal’s president Bidhya Devi Bhandari is expected to visit India in April—after her first proposed visit to India in May last year was called off by the Nepalese government.