Nepal and India to Transform Proximity into Prosperity

We are living in an increasingly uncertain and volatile world, shaped by rapid change and upheaval driven by myriad, overlapping factors.

The risks posed by global climate change continue to accumulate. Shifting geopolitical dynamics are reshaping international relations, making existing challenges more severe and creating new complexities. International financing and trading regimes, as well as global supply chains remain under significant strain, making our collaborative efforts more urgent than ever.

Bound by history, geography, familial and cultural affinity, Nepal and India must deepen their cooperation in the face of such challenges, and work actively to maintain stability and build resilience. We must hold our hands together for peace, progress and prosperity.

As close neighbours with unique ties of mutual trust, friendship and cooperation, our two countries have a shared vision for the future. Advancing Nepal-India partnership is instilling hope in the millions of people across both our nations to enhance their lives and livelihoods. The increasing interactions between our students, pilgrims, traders, tourists, youths and farmers showcase that the people-to-people relationship remains at the core of our increased engagement. The focus on sports cooperation has further generated additional goodwill and momentum both at people and government levels.

This bond has been further strengthened by a MoU to locally develop a sports village at Phapla at Dhangadhi in Sudurpaschim Province.

Nepal and India are on a common journey toward peace, stability and prosperity, a journey driven by the hopes of our peoples and the promise of our partnership.

The foundations of Nepal-India relations have never been stronger than they are today, and the promise they hold for the future has never been greater before.

In recent years, we have hit significant milestones in deepening our bilateral cooperation. These range from landmark agreements on power trade and cross-border transmission lines to envisioning large infrastructure development projects in roads, railways and bridges, to name just a few.

This is only the beginning, and there is a lot more to come. Looking forward, there are several areas of cooperation where Nepal and India must lay special emphasis.

The foremost priority in Nepal-India relations is the need to advance our economic partnership by intensifying cooperation in trade, transit and investment. The ICs that have been built and are being constructed will add greatly to this dimension.

Historically, trade has played a crucial role in powering economic growth and sustaining the prosperity of our peoples. Today, trade and productive investments in areas like high-tech sectors, digital technologies, and physical and social infrastructure are catalysing the structural transformation of our economies, and promoting regional integration.

We should build upon and harness the on-going process of economic transformation of the economies of Nepal and India by promoting bilateral trade and facilitating two-way people-to-people exchanges.

Due to its geographical location, and plentiful natural and human resources, Nepal is well-placed to become a crucial link in global and regional supply chains. This presents vast and conducive opportunities for extensive collaboration between Nepal and India.

The energy sector stands as a prime example of fruitful cooperation between our two countries. Nepal’s enormous hydropower potential offers a clean, climate-resilient and renewable energy source that can be harnessed for generations to come. Harnessing hydropower holds the key to strengthening energy security and enhancing economic development in our countries and beyond.

Bilateral collaboration on green energy will, in turn, strengthen cooperation in key sectors such as information technology and physical infrastructures, which figure among the high-growth sectors in both Nepal and India.

At the same time, green energy cooperation will foster mutual interdependence between our two countries by reducing reliance on hydrocarbons and promoting clean and sustainable energy sources.

It gives me great pleasure to note that India’s commitment to import 10,000 MW of electricity from Nepal over the next decade reflects the growing momentum in Nepal-India energy cooperation.

In recent years, Nepal and India have agreed to deepen cooperation in the power sector, including developing transmission interconnections, grid connectivity, and power exchange and cross-border electricity trading on mutually acceptable terms.

We are hopeful that enhanced transmission interconnection and grid connectivity will pave the way for a common electricity market which could eventually be expanded to sub-regional and regional levels in the future.

In fact, there is tremendous potential to develop Nepal as a regional hub for green growth by unlocking its hydropower resources and powering industrial corridors across Nepal and India.

While hydroelectricity will strengthen energy security for both countries, the industrial corridors will facilitate cross-border trade clusters, improve logistics efficiency and catalyse people-to-people connectivity and tourism.

Equally critical to this vision is the need for robust physical and digital connectivity. Easier and faster access to ports and markets boosts trade by expanding operations and enhancing efficiency. Better connectivity makes investments in industrial enterprises, warehouses, and agro-processing centres more viable, spurring economic activities and urbanization, generating employment and raising productivity gains across a wide range of industrial sectors.

Now is the moment for Nepal and India to transform proximity into prosperity by improving connectivity between the two countries across platforms. I look forward to a connected future where a Nepali farmer’s ginger reaches Mumbai markets in 24 hours and an Indian tourist boards an evening flight to Pokhara after a morning meeting in Delhi. This is kind of connectivity and closeness we must build and I am hopeful that dialogues such as this one will focus on providing necessary feedback on these important issues.

Nepal and India must, therefore, enhance mutual connectivity by investing in roads, railways, waterways, airways and digital infrastructures. Seamless connectivity between our two countries will not only augment our integration into regional and global supply chains but also upgrade transit trade and border economies, and benefit the local people.

As Nepal and India look towards a future of rising economic growth and development, we should also be mindful of the seismic changes the global economic landscape is experiencing today.

At present, the global economic landscape is pivoting towards a knowledge-based economy, and services and digital platforms. We should place a greater thrust should be placed on the digital economy and technology innovation, such as AI and automation, big data and analytics, biotechnology, as well as education and skills development and the creative economy. We should look for areas of complementarities in our respective economies and encourage innovations and mutual learning.

While India has large-scale digital skilling and innovation ecosystems, Nepal’s growing young and tech-savvy population and green energy resources offer complementary dynamics. Based on these pillars of mutual strengths, our countries are capable of creating cross-border digital value chains and nurturing regional innovation ecosystems.

We should promote tech hubs, start-ups and digital innovation platforms in mutual collaboration, and let our young people work, grow and prosper together.

Nepal and India share one of the most profound and enduring civilizational and cultural relationships in the world. The Himalayas and its foothills are inextricably linked with the vast expanse of the Gangetic plains, as are the cultures, histories, and – importantly – the destinies of our two countries, which are closely intertwined. We remain thankful for the the high level participation from India and all the support and cooperation for the first edition of the recently concluded ‘Sagarmatha Sambaad’ which focus on “Climate Change, Mountains and the Future of Humanity”. We know that climate resilience remains a shared responsibility for both our nations.

Nepal-India relations are built on foundations laid at the very dawn of civilization. The lives of our citizens are animated by shared values, spirit, and memories. Nepal and India share the commitment to preserve, strengthen, and augment this common civilizational and cultural heritage. And now added to this is our

The world today stands at the cusp of an epochal transformation, driven by rapid technological change, shifting geopolitical dynamics and a looming environmental crisis.

While it certainly brings with it multiple challenges of its own, I believe this new era also presents us with a whole new set of exciting opportunities for ending poverty, disease and illiteracy, by enabling positive change in the lives of our peoples.

Nepal, in partnership with its neighbours and friends, looks forward to a future of peace, stability and prosperity in this new era.

The Rigveda proclaims:
“Om sum gachchha dham sum vada dham sum vo manāṃsi jānatām.
Devā bhāgaṃ yathā pūrve sañjānānā upāsate”

This ancient hymn calls upon us to walk together, speak to each other in harmony and unite our thoughts so that we may partake of our shares just as the divinities of yesteryears did.

Drawing inspiration from this sacred wisdom, we look forward to a future where Nepal and India prosper together in peace, harmony and friendship, and realize our shared aspirations for a better world.

(The article is an edited version of Foreign Minister of Nepal Dr. Arzu Rana Deuba’s speech at Nepal-India Strategic Dialogue organized by Center for Social Innovation and Foreign Policy (CESIF) & Ananta Aspen Centre in Kathmandu, Nepal.)