India’s foreign secretary has met Nepal’s prime minister, Balendra Shah, in Kathmandu after talks on development, energy and flood recovery ahead of Shah’s proposed visit to India.
Vikram Misri paid a courtesy call on Shah on 5 November, during a two-day visit to Nepal. Nepal’s foreign ministry said the pair discussed matters of bilateral interest at the prime minister’s office.
Misri met his Nepalese counterpart, Amrit Bahadur Rai, on 4 November. He also held separate meetings with Nepalese ministers responsible for foreign affairs, finance, infrastructure and energy.
Nepal’s foreign ministry said the foreign secretaries discussed high-level exchanges, connectivity, trade, development cooperation, energy and people-to-people relations. The discussions are part of preparations for Shah’s proposed trip, but its dates have not been formally announced.
Funding proposals under discussion
Nepalese officials have described proposals for around $2 billion or more in Indian assistance, combining lines of credit and grants. The proposals are not an agreed package, and the scale and terms of any support remain to be settled.
Nepalese officials have described proposals for more than $1 billion in credit, primarily for domestic electricity transmission lines and other infrastructure, and a $500 million grant request to upgrade the Siddhartha Highway, which links Sunauli on the Indian border with Pokhara.
A further $500 million could be sought for reconstruction and rehabilitation after the Bhotekoshi flood in August, potentially as a grant. Officials involved in separate discussions have described the proposals as preliminary and said some projects have yet to be identified.
At the Kathmandu talks, Misri said India was ready to consider requests for assistance and projects as Nepal moved towards rebuilding. That expression of willingness is not a commitment to fund any particular project or amount.
The flood damaged hydropower facilities as well as other infrastructure. In September, India’s power ministry approved electricity exports to Nepal of up to 654 megawatts for 18 hours a day until 31 December. The ministry said the amount available from January would be reviewed in December.
Projects and the wider relationship
The financial request follows earlier Indian credit offers that Nepal has struggled to use in full. Former Nepalese ambassador to India Shankar Sharma has said requirements involving Indian raw materials, technicians, engineers and machinery hampered the use of earlier soft loans. The treatment of any new credit would depend on the conditions eventually negotiated.
During Misri’s visit, Nepal’s energy minister, Biraj Bhakta Shrestha, raised the expansion of electricity trade and the completion of hydropower projects. The two sides also discussed cooperation on water resources and early warning systems. Finance Minister Swarnim Wagle discussed the wider economic partnership, while Infrastructure Development Minister Sunil Lamsal raised infrastructure and connectivity.
Officials are discussing possible projects and issues for the leaders to address during Shah’s proposed visit to India, including trade, transit and transport links. These are prospective agenda items, not agreements reached during the foreign-secretary talks.
The diplomatic meetings come after a visit by Misri planned for May was postponed. The neighbours also have an unresolved boundary dispute involving the Lipulekh area.
In May, Nepal’s foreign ministry said Lipulekh was Nepalese territory and raised its concerns with India and China over plans for a pilgrimage route through the pass. India rejected Nepal’s territorial claim. Nepal said it remained committed to resolving the boundary issue through diplomatic means.
The current talks have brought officials together on a broad set of practical issues, but the next steps depend on further discussions. Neither the proposed funding nor the dates of Shah’s visit had been formally settled.
Featured image: AI-generated illustration.
