India and Nepal pressed the reset button on bilateral relations as the government welcomed Prachanda, the new PM of the Himalayan state, and committed to go the extra mile to fulfil Kathmandu's development priorities. After talks with Prachanda on Friday , Prime Minister Narendra Modi said “India stands ready and prepared to strengthen its development partnership with Nepal“.
The two countries signed three agreements for upgrading Terai highways and an additional line of credit for new projects such as Phase-2 of Terai roads, power transmission lines, substations and a polytechnic. Modi also announced a credit of $750 million for post-earthquake reconstruction, which has been delayed. “India's initiatives for open skies, cross-border power trade, transit routes, and cross-border connectivity will directly benefit Nepal and help strengthen our economic partnership,“ Modi said in a statement.
India has decided to focus on economic and power projects for the time being. Therefore, three power projects -Pancheswar, Arun III and Upper Karnali -came up for detailed discussions. The government is expected to come out with a framework policy on cross-border power trade in the coming days, which will make it easier for Nepal to sell power.
Politics, however, was not far behind. In his statement, Prachanda said, “You are aware that my government has made serious efforts to bring everyone on board as we enter the phase of implementation of the Nepali constitution.“
India was a lot more circumspect in its reaction. In their talks, Modi impressed upon Prachanda the importance of a more “inclusive“ system. Briefing reporters, foreign secretary S Jaishankar said, “Our position is that we hope Nepal will successfully implement the constitution reflecting the aspirations of all its people.“
Prachanda has announced that resolving the Madhesi crisis would be his top priority . However, he failed to register an amendment motion in parliament before his visit.The constitution amendment needs two-thirds majority (397 votes) to go through, and need the support of the K P Oli-led opposition, which is unlikely to happen.