Indian Prime Minister Narendra Modi and US President Trump have had a love-hate relationship. The two populist leaders have now fallen out, threatening a full scale Indo-American trade war. Many of Nepal’s exports to the United States like garments and rugs are also what India sells to the US. So, after Donald Trump announced additional tariffs on Indian exports to total 50%, Nepal could have an advantage. But this is only if the government plays its cards right and develops a long term strategy to boost export of items in which it has comparative advantage, and find new export products. The recent fallout ostensibly comes after India ignored western sanctions and continued to purchase Russian oil, and could be linked to Trump’s meeting with Russian president Vladimir Putin in Alaska on Friday in which he wants to use India as a bargaining chip. “Trump has not honoured any international trade agreements, making the global trade regime unstable,” says economist Posh Raj Pandey. This could mean that the US could still pull back on tariffs, just as he has given China a reprieve of another 90 days this week. Compared to other South Asian countries, including India, Bangladesh and Sri Lanka, Nepal faces a relatively low tariff rate of 10%. Theoretically this could put Nepali exports at an advantage for items like garments and other products like tea. But it also carries its own risks.  <figure><img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250814090852_1d2fe71e4f7c5f82d72240714c6a7a140d59230096eac995ca3264a5c2ed00a2.jpg" data-media-id="editor_0" data-image-id="20250814090852_1d2fe71e4f7c5f82d72240714c6a7a140d59230096eac995ca3264a5c2ed00a2" data-rendition-name="original" width="1266" height="860" loading="lazy" alt="Nepal-US trade graph NT"></figure>  Some 64% of Nepal’s imports are from India, and US tariffs could make those products more expensive. A stronger USD vis-a-vis the INR would also devalue the Nepali rupee and increase the cost of imports from India of raw material for its exports, for example, garments. The manufacturing sector in Nepal has never reached its true potential, its main export items to India are soya and palm oil which are actually just bulk imports of the same oils repackaged for export. Domestic production lacks capacity to keep up with demand. “Nepal’s productive capacity must be increased in order to boost exports, and the market should be diversified for Nepal to take advantage of a competitive market,” says Pandey. Indian exporters could try to reroute their finished products through the open border with Nepal, changing the tag from ‘Made in India’ to ‘Made in Nepal’ to avoid US tariffs. China did this by relocating its factories to Vietnam in the past, but such re-labelling may result in punitive measures. “It is not worth the risk, we should be careful. Besides, there is no domestic value addition in such cases,” states Kharel. Nepal has a trade deficit with the US of Rs7.64 billion, which is probably why Trump has not increased tariffs on Nepal’s exports to more than 10%. Nepal’s main exports to the US are ready-made garments, dog chews and carpets. Nepal had preferential market access to the US, but did not take much advantage of it. “Nepal’s garment export to the US stands at Rs2 billion, and we could try to increase production and export more to take advantage of relatively lower tariffs, but reaching production worth Rs10 billion is not practical and Nepal does not have the capacity either,” says Pandey. Furthermore, if Nepal increases exports to the US and creates a trade surplus, it may raise eyebrows in Washington and Nepal could be slapped with higher tariffs if Trump is still around. In a modern multilateral world, Donald Trump has pressed ahead unilaterally, using tariffs to arm-twist allies to get all kinds of concessions, even those not related to trade. Trump thinks he is doing this to protect the domestic US industry, but it is already backfiring with higher domestic consumer prices. Adds Pandey, “Trump has used the tariffs as a Swiss Army knife to cut through everything. The tariffs are used as an instrument for national security, to increase investment and even to end conflict.” Trump claimed he initiated the ceasefire between India and Pakistan over their recent conflict by threatening both countries with tariffs. New Delhi denied Trump’s claims, while Pakistan acknowledged his role, even nominating him for the Nobel Peace Prize. REGIONAL HEGEMON “India had wanted to establish itself as a regional hegemon by aligning itself to the West,” says Paras Kharel, executive director at South Asia Watch on Trade, Economics, and Environment (SAWTEE). But the tariff tiff with India may have thrown that strategy off kilter. Most countries use diplomatic channels to resolve existing trade issues. However, Trump has chosen the path of coercive diplomacy, which was seen in his response to issues like migration and the use of veto power at the United Nations. India is the world's third largest consumer of oil, with Russia accounting for 30% of the country’s oil imports. Russia was also the largest arms supplier for India, but that has decreased in recent times, as India shifted towards the US, Israel and France. India is the largest arms importer in the world, and is making more and more purchases from American manufacturers of weapons systems. But India has already retaliated by cancelling planned imports of military equipment from the US. Uncertainty looms large as Trump’s volatile flip-flopping upends global trade. The unpredictability was underlined by Trump extending his tariff truce for China by 90 days, saying Beijing "has been dealing with it nicely". The tariff threat on Indian exports could also be similarly postponed if New Delhi appeases Trump with compromises. But Modi seems in no mood to give up India’s national interest, especially by allowing American agricultural imports. Modi is all set to visit China for the first time in seven years for the Shanghai Cooperation Organisation (SCO) Summit on 31 August in Tianjin. This could signify the beginning of a major realignment in geopolitical alliances in the Asia-Pacific. Nepal is a small player, but when India and China are buffeted by global turbulence, it will rock Nepal as well. Nepal therefore needs to boost trade capacity to take advantage of new opportunities. Says Pandey, “Nepal needs to diversify its exports, find new markets and seek alternative finance sources.”

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Nepal and the US-India tariff tiff

The post World War II <a href="https://nepalitimes.com/review/west-is-west">decade of the 1950s</a> saw the dismantling of colonial systems, establishment of a new world order with the United States replacing Britain. <a href="https://nepalitimes.com/opinion/peacemongers-at-india-pakistan-border">India and Pakistan</a> had just gained independence and were still traumatised by partition.&nbsp; In China, Mao Zedong came to power after 20 years of revolution, and promptly annexed Tibet. The <a href="https://nepalitimes.com/here-now/a-new-cold-war-in-the-himalaya">Cold War</a> between the US and the Sino-Soviet alliance led to proxy wars in Korea and Vietnam. In Nepal itself, <a href="https://nepalitimes.com/here-now/inside-story-of-nepal-s-rana-dynasty">the Ranas</a> were replaced by <a href="https://nepalitimes.com/here-now/history-on-canvas">the Shahs</a> in 1951, and ten years later <a href="https://nepalitimes.com/here-now/last-days-with-bp-koirala">BP Koirala</a> became the first democratically elected prime minister — soon deposed in a coup by King Mahendra. Nepal opened up to the world and tried to keep a delicate balance between global and regional powers. The book, Nepal in the Long 1950s, explores politics, economics and the socio-culture milieu in the decade following the end of the Rana rule. Edited by researchers Pratyoush Onta, Lokranjan Parajuli and anthropologist Mark Liechty, the book is a collection of 10 essays, the first six of which place <a href="https://nepalitimes.com/news/the-geopolitics-of-nepal-s-politics">Nepal in the larger geopolitical context</a>, while the last four explore the role of foreign specialists and institutions in reshaping Nepal. Prawash Gautam examines how the last years of <a href="https://archive.nepalitimes.com/article/Nepali-Times-Buzz/the-rana-reign-a-recap-of-history,3751">Rana rule</a> were marked by looser controls, enabling the emergence of the public sphere. One tea shop near Dharara became a space for socialisation, discourse, as well as political organisation.&nbsp; However, while this teashop was unique in that it allowed customers from ‘lower’ caste communities, Gautam says <a href="https://nepalitimes.com/news/nepal-s-caste-struggle">caste-based discrimination</a> and limited access to women still prevented public spaces from <a href="https://nepalitimes.com/banner/everybody-counts-in-nepal">being inclusive</a>. Bandana Gyawali writes about how the Nepali notion of unnati (progress), was replaced by the concept bikas (development), a ‘more democratic’ term championed by the American aid programs that associated development with material gain which at the time meant little to Nepalis.&nbsp; Peter Gill’s chapter discusses efforts to legislate and implement socio-economic reform, including birta abolition, tenancy rights, and land distribution. However, he writes, these reforms were ultimately a populist tool used by new leaders for political gain. Sharad Ghimire delves into the state’s disaster response in the aftermath of<a href="https://archive.nepalitimes.com/article/nation/60-years-after-1954-devastating-flood-same-failings-of-government-today-post-quake,2433"> the deadly 1954 floods</a>. Political incompetence and attempts to politicise the crisis led to the failure of relief led by Prime Minister M P Koirala, ultimately deepening rifts between himself and leaders of the ruling coalition — giving King Mahendra the chance to assert himself.&nbsp; Meanwhile, the US answered Nepal’s call for help in <a href="https://nepalitimes.com/banner/disastrous-management-in-nepal">disaster management</a> to curb possible Communist influence in Nepal, much to India’s annoyance. Pratyoush Onta examines how <a href="https://nepalitimes.com/here-now/kingdom-lost-republic-gained">post-Rana politics</a> encouraged Nepalis to realise their intellectual freedom and pursue knowledge creation and distribution. The formation of the short-lived Nepal Sanskritik Foundation, set up by political leaders, scholars, and intellectuals like Bal Chandra Sharma and Isvar Baral who had witnessed and participated in India’s anti-colonial movements, facilitated social research and knowledge enterprise. Two chapters discuss the development of <a href="https://nepalitimes.com/editorial/lessons-not-learnt-homework-not-done">Nepal’s education sector</a>. Lokranjan Parajuli looks into how domestic and foreign actors impacted the founding of Tribhuvan University, documenting the role of queen consorts Janti Rajya Laxmi Devi Shah and Queen Ishwari Rajya Laxmi Devi Shah, even as Mahendra remained wary lest it produce intellectuals who would undermine his authority. Read also: <a href="https://nepalitimes.com/banner/america-nepal-and-the-royal-coup">America, Nepal and the Royal Coup</a>, Tom Robertson India and the US were vying to help TU, writes Parajuli, but China and USSR arrived to also support higher education sector with less strings attached. This led to US and India joining forces, and the US eventually let India take the lead. Susan Heydon’s research into <a href="https://nepalitimes.com/opinion/is-free-health-care-possible-in-nepal">Nepal’s healthcare</a> sector reveals that development in biomedicine was in large part due to assistance from Christian missionaries, despite Nepalis’ wariness towards them, visiting foreign <a href="https://nepalitimes.com/here-now/grass-is-greener-overseas-for-nepals-doctors">healthcare experts</a>, as well as <a href="https://nepalitimes.com/news/e75-million-eu-aid-to-nepal-for-covid-19-ckmyfbkq">international aid</a>.&nbsp; As <a href="https://nepalitimes.com/news/how-usaid-cut-affects-nepal">USAID fund cuts impact Nepal</a>, Jeremy Rappleye’s chapter on the US development assistance and Nepal’s modern education system is relevant read. He recalls how American educator Hugh Wood’s aid-centered blueprint for educational development in the 1950s was incongruous with what Nepali officials wanted. Wood’s model laid the groundwork for <a href="https://nepalitimes.com/banner/teaching-nepali-teachers-to-teach-better?fbclid=IwY2xjawIfg2JleHRuA2FlbQIxMQABHRlYZ7S9dci12M2TMdHcirodLAD3e5OHzlfKW0z07B4plWF8Ofxo88JPfQ_aem_Ka7WIxuhTW0ghPf2qD-Yzg">Nepal’s modern education</a>, writes Rappleye, although it was not entirely appropriate. Former USEF Nepal director Thomas Robertson takes on the US ‘Four Point Program’ aimed at making Nepal reliant on American support. With the region in the grip of the Cold War, the US sought to expand its sphere of influence in Asia, in particular to stop India from going the way of China. Nepal therefore became strategically important to America’s aspirations for the region, writes Robertson. This meant Washington poured aid and into Nepal, including anti-malaria programs and land reform initiatives — in stark contrast to <a href="https://nepalitimes.com/news/the-great-game-2nd-half">Donald Trump’s current pullout of USAID, MCC and other programs</a>. Mark Liechty ends the book with his exploration of the life and times of Boris Lisanevich and his Hotel Royal which ushered Nepal into the age of <a href="https://nepalitimes.com/news/missing-out-on-nepal-s-tourism-potential">tourism</a>. But Boris was not particularly well versed in the art of hospitality, and while Nepalis in this burgeoning sector realised the opportunities and went about realising those potentials Lisanevich continued to dwell in his anachronistic <a href="https://nepalitimes.com/news/nepal-britain-mark-centenary-of-1923-treaty">colonial fantasy</a> of Nepal, not doing himself any favours.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250220080248_ac072d9d13e541b5d8616f34edb4aae86a8859c6fe44682932408722fa9bff37.jpg" data-media-id="editor_23" data-image-id="20250220080248_ac072d9d13e541b5d8616f34edb4aae86a8859c6fe44682932408722fa9bff37" data-rendition-name="original" width="1136" height="702" loading="lazy" alt="Nepal in the long 1950s"> </figure>

Shristi Karki

Nepal in the world, the world in Nepal

India will not travel to Pakistan for the cricket Champions Trophy this year, and the two countries will play each other at a ‘neutral’ ground.&nbsp; Since cricket diplomacy has been bowled out, can climate diplomacy deliver a googly to be the gamechanger to mend relations between the estranged South Asian neighbours?&nbsp; They can start with addressing crossborder air pollution. The air quality index or AQI in Multan in November was over 2000, Lahore 1000, and Delhi 500 AQI.&nbsp; The average concentration of fine suspended particulate matter (PM2.5) is 11 times higher than the World Health Organization’s acceptable limit. In Pakistan, it is close to 15. Every winter is a season of the gas-chamber in both countries. Thick smog brings life to a standstill in northern India and Pakistan. Delhi set in motion Stage IV of the Graded Response Action Plan for pollution, closing schools, banning construction, &nbsp;restricting trucks entering the city. In Lahore, officials declared pollution a ‘calamity’.&nbsp; In India over 40,000 people were treated for respiratory ailments. UNICEF in Pakistan attributed 12% of deaths in children under-5 in Pakistan to air pollution.&nbsp; A July 2024 study in the journal Lancet revealed that 11.5% of deaths in Delhi are linked to air pollution. A study by the Indian Council for Medical Research said there were 1.7 million deaths in India in 2019 due to dirty air.&nbsp; Pakistanis are on average living 3.9 years less because of poor air quality. In Lahore, they lose seven years of life.&nbsp; Smog is now called the ‘fifth season,’ but the air is bad all year round. In 2023, Delhi recorded only one day in which air was healthy enough to breathe. In 2024, the AQI never fell below 50 on any day, so air pollution is not a seasonal problem. Come winter, India and Pakistan blame each other for the toxic air they share, but there is also growing awareness that the solution has to be collective.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250101060128_9ebf4319e67bea9ece43735860bddd977ae7181ae83d4f8a7de0dc93ac87ba44.jpg" data-media-id="editor_0" data-image-id="20250101060128_9ebf4319e67bea9ece43735860bddd977ae7181ae83d4f8a7de0dc93ac87ba44" data-rendition-name="original" width="1260" height="741" loading="lazy" alt="Dirty air kills both Indians and Pakistanis NT"> <figcaption>Fog mixed with thick pollution haze envelopes Pakistan and northern India in this NASA satellite image on new year's day 1 January.</figcaption> </figure>  Maryam Nawaz, Chief Minister of Punjab in Pakistan made a case for “climate diplomacy” in November. “This is not a political issue, it is a humanitarian one,” she said. India’s Joint Secretary of the Ministry of Environment, Forest, and Climate Change Naresh Pal Gangwar at COP29 drew attention to the transboundary nature of air pollution. He noted that most countries in the region share the ‘Indo-Gangetic Airshed’, and <a href="https://yawmle.clicks.mlsend.com/tl/cl/eyJ2Ijoie1wiYVwiOjU4NTIxOCxcImxcIjoxNDIxNTE2OTk5MTY2NTQxNzAsXCJyXCI6MTQyMTUxNzEwODk0MTk1NzI5fSIsInMiOiJlZDIyMWNjMDJhYTQwZmI1In0" target="_blank">stressed the need</a> for collective action to tackle air pollution. But little has changed on the ground. The relationship between India and Pakistan has remained strained, neither side has had a high commissioner in each other’s capitals since 2019.&nbsp; Indian external affairs minister S Jaishankar's visit to Islamabad for the Shanghai Cooperation Organisation meeting in October was a symbolic move forward, but there was no substantial conversation for further engagement. As a health crisis gets worse, conversations on air pollution and for possible solutions <a href="https://yawmle.clicks.mlsend.com/tl/cl/eyJ2Ijoie1wiYVwiOjU4NTIxOCxcImxcIjoxNDIxNTE2OTk5MjA4NDg0NzgsXCJyXCI6MTQyMTUxNzEwODk0MTk1NzI5fSIsInMiOiI1MzcyZTM2NWFjNGI3ODNiIn0" target="_blank">may not be avoidable</a> for too long. “The wind knows no boundary,’’ says researcher Devindra Sharma in Punjab. “We can’t find solutions without talking across the border, especially for Punjab.” Cities across South Asia compete for the most polluted air in the world. The hot-spot for the worst air in the world, 37 out of the 40 most polluted cities, are located in the region. From Kathmandu to Lahore, Delhi to Dhaka residents live under a perpetual smog. This brown cloud across northern India and Pakistan during winter is visible from space. “A unified, science driven approach by the Punjabs can be the answer to the region’s air quality crisis,’’ Jolly Masih, an agribusiness scientist at BML Munjal University in Gurgaon. Track 2 dialogues between India and Pakistan space have tried to begin conversations around nuclear weapons, military and trade. But air pollution and climate change is still not included.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250101060128_cfca4db7aa34215d56125fff22dc185ad666b3ad8f7162955fe6f5bc7ab8f26a.jpg" data-media-id="editor_3" data-image-id="20250101060128_cfca4db7aa34215d56125fff22dc185ad666b3ad8f7162955fe6f5bc7ab8f26a" data-rendition-name="original" width="3941" height="4927" loading="lazy" alt="Dirty air kills both Indians and Pakistanis NT"> <figcaption>Smog in India</figcaption> </figure>  In November, the UK-based nonprofit Conciliation Resources brought experts from India and Pakistan to Nairobi to focus on climate breakdown. Diplomats, experts and journalists recommended knowledge-sharing of best practices.&nbsp; Air quality and climate change is a possible area that can be ‘ring fenced’ from politics, says TCA Raghavan, India’s former high commissioner to Pakistan. Unlike trade and water that can be political, air pollution does not have the baggage of earlier confidence-building measures for possible ‘ice breaking’. It also has the advantage of being for greater common good and has not been discussed politically before, unlike water. “Air pollution is a subject with positive appeal with youth and the new generation and could be a win-win for both sides,” says Rakesh Sood, former Indian ambassador to Nepal. India and Pakistan have banded together for a greater cause before. In 2020, they cooperated to fight a locust invasion that was destroying their crops on both sides. The mechanism requires monitoring in both countries and has survived bilateral tension.&nbsp; There is also a mechanism for sharing information about shared rivers, through the Indus Water Treaty which has functioned even during periods of strife. But there is no shared data on air pollution. “The similarities in source profiles, geography and policy responses mean that there are clear opportunities for both countries to learn from each other,’’ says Bhargav Krishna of the Sustainable Futures Collaborative based in India. In areas like transportation or crop burning, Pakistan can learn what has and hasn't worked in India to tailor a modified approach. For example, Indian farmers currently do not burn Basmati crop residue, unlike their counterparts in Pakistan. Other possible areas of cooperation include early warning systems especially with the dust storms, suggested Bharati Chaturvedi of Chintan Environmental Research and Action Group.&nbsp; A study by Chintan titled ‘Saaf Saans — Breathing Clean: A Citizen Survey on Air Pollution’, <a href="https://yawmle.clicks.mlsend.com/tl/cl/eyJ2Ijoie1wiYVwiOjU4NTIxOCxcImxcIjoxNDIxNTE2OTk5MjUwNDI3ODgsXCJyXCI6MTQyMTUxNzEwODk0MTk1NzI5fSIsInMiOiJmM2JhZjkxZDk5OWQ0MTAwIn0" target="_blank">surveyed 500 respondents</a> in Delhi to find that 33 percent of residents claimed that they spent extra on doctor fees and medicine. Ninety percent of respondents said they were impacted by air pollution. For India and Pakistan, where the bulk of those exposed to the fine particulate matter live on the margins, <a href="https://yawmle.clicks.mlsend.com/tl/cl/eyJ2Ijoie1wiYVwiOjU4NTIxOCxcImxcIjoxNDIxNTE2OTk5MzAyODU2NzMsXCJyXCI6MTQyMTUxNzEwODk0MTk1NzI5fSIsInMiOiJmYmRiYzJlYjcyMWNlYTVhIn0" target="_blank">cooperation is especially critical</a>. It can help save Indian lives and Pakistani lives. © Sapan News &nbsp;Mandira Nayar was until recently Deputy Chief of Bureau at The Week in Delhi.

Dirty air kills both Indians and Pakistanis

Thirty years after it abruptly pulled out of the Arun III project, the World Bank appears to have developed cold feet about an even larger project on the river in eastern Nepal. After opposition by civil society in Nepal, Japan and Europe, the Bank’s new president James Wolfensohn <a href="https://nepalitimes.com/20-years-ago-this-week/arun-iii">exited from Arun III</a>. The project’s generation capacity has been doubled to 900MW and it is being development by India’s state-owned SJVN Limited.&nbsp; Whereas in 1995, the opposition to Arun III was mainly from activists, this time it is said to be India’s displeasure with the Bank’s involvement in the <a href="https://nepalitimes.com/news/world-bank-flip-flop-on-upper-arun">1,061MW Upper Arun</a>. Delhi is so sensitive to the issue that sources said it even leaned on Indian-born American President of the World Bank, Ajaya Banga to cancel his trip to Kathmandu for the IDA21 Replenishment Meeting in June. When it gets the green light, Upper Arun will be the most expensive hydroelectric project in Nepal so far with a price tag of $1.6 billion. The semi-storage scheme is located on the transboundary Arun River 15km from the Chinese border after it cuts through the Himalaya between Mt Everest and Kangchenjunga. Beijing is said to have no objections to the project, but India’s silence is said to stem <a href="https://nepalitimes.com/here-now/geopolitics-of-nepal-s-rivers">from its strategic interest</a> in not allowing anyone else to build large storage projects on the tributaries of the Ganga in Nepal. India’s SJVN is also currently constructing three large projects downstream, including Arun III and Lower Arun with a total generation capacity of nearly 2,000MW.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20241220111240_f6e0fda98407360d7a4456e861481ad811f7a75ce5ab7605158e980615f3fb16.jpg" data-media-id="editor_3" data-image-id="20241220111240_f6e0fda98407360d7a4456e861481ad811f7a75ce5ab7605158e980615f3fb16" data-rendition-name="original" width="850" height="771" loading="lazy" alt="Upper Arun Map NT"> </figure>  Nepal Electricity Authority (NEA) set up Upper Arun Hydro-electric Limited (UAHEL) as a subsidiary and in May signed up the French firm Tractebel for detailed design of the scheme. Experts say the design will have to take into account future climate-induced glacial lake outbursts like the one that swept away the 1,600MW <a href="https://nepalitimes.com/news/sikkim-flood-is-warning-to-nepal">Chungthang Teesta</a> III in Sikkim last year built at a cost of $1.7 billion.&nbsp; Upper Arun’s financing will be 70% loans and 30% equity. The World Bank had already earmarked $750 million with the Asian Development Bank (ADB) with Japan’s JICA also joining. But UAHEL Managing Director Fanendra Raj Joshi said there was no word either way from the World Bank, which meant there was no financial closure yet. Read also: <a href="https://nepalitimes.com/here-now/right-climate-for-nepal-s-energy-transition">Right climate for Nepal’s energy transition</a>, Ramesh Kumar All this is in stark contrast to the optimism last year after Finance Minister Prakash Mahat returned from an IMF meeting in Morrocco and announced that the World Bank would be the main lender in Upper Arun.&nbsp; In November 2024, Mahat even took a helicopter with World Bank Managing Director Anna Bjerde and ADB Director Ramesh Subramaniam to the Upper Arun site and it looked like the loans were in the bag. It would also be the first large project in Nepal in which both big multilateral lenders would be involved.&nbsp; In April this year, an ‘agreement in principle’ was even reached between Mahat’s successor Barsaman Pun and World Bank Vice President for South Asia Martin Raiser to develop Upper Arun. But the loan meeting planned for June was cancelled. &nbsp; A Finance Ministry official told Nepali Times: “The World Bank told us categorically in November in Washington DC that India was opposed to its involvement in Upper Arun.” &nbsp; When Prime Minister Pushpa Kamal Dahal visited Delhi in June, Indian officials reportedly said they were interested in developing Upper Arun and evacuate its power through an extension of the 400kV transmission line it is building. Although Beijing had given the go ahead to the World Bank and ADB involvement in Upper Arun, it may not be as happy about an Indian company so close to its border. As a semi-reservoir project, Upper Arun can generate electricity at full capacity for up to six hours a day even in winter, unlike the schemes downstream which are run-of-the river in which generation depends on water flow.&nbsp; Read also: <a href="https://nepalitimes.com/multimedia/rivers-be-dammed">Rivers be dammed</a>, Pinki Siris Rana&nbsp; India is involved in projects in Nepal’s rivers that will generate a total of 8,000MW when complete. SJVN Limited is also taking over from the Chinese the 769MW Tamor project in the Arun Basin. &nbsp; Says Fanendra Raj Joshi of Upper Arun Hydro-electric Limited: “Nepal can find alternative sources of funding and we will go ahead with this project even if the World Bank decides not to provide the loan.”&nbsp; Joshi and the NEA’s Kulman Ghising (pictured, below) attended a hearing with indigenous communities at the project site in Sankhuwasabha this week. Ghising told the gathering that if the World Bank pulled out Nepal would carry on with Upper Arun through “domestic and diaspora investment with the same financial package as Upper Tama Kosi”. The 546MW <a href="https://nepalitimes.com/editorial/when-it-rains-it-pours-ksqprbu3">Upper Tama Kosi was knocked</a> by a massive landslide in September and will not be fully operation at least for a year. &nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20241218091240_bfaaadc83881c7551d1dd501447b7a22c10b89104aeea3cab58a100444b016d5.jpg" data-media-id="editor_8" data-image-id="20241218091240_bfaaadc83881c7551d1dd501447b7a22c10b89104aeea3cab58a100444b016d5" data-rendition-name="original" width="800" height="600" loading="lazy" alt="Kulman Ghising"> </figure>  “This is a project that can transform the local economy and Nepal’s economy as well,” Ghising added. “We will go ahead with blended financing from all levels of government.” Despite the lack of financial closure, construction of the project is expected to get underway in 2026 for completion in six years. Construction of a 21km access road from the power house to the dam site along the Kosi Corridor highway is in full swing through difficult terrain.

Upper Arun question mark

The shock wave of the return of Donald Trump to the White House, as well as the Republican control of the Senate and possibly the House, will impact not just America but people across the world.
In South Asia, it will mainly change the way Washington views and deals with China and India, and in more unpredictable ways. The impact on Nepal will be governed by how US relations with the country’s two giant neighbours develop in the next five years.
“Compared to Harris who has been focused more on multilateralism and maintaining allies, Trump is more confrontational and unilateral,” says National Assembly member and former Foreign Minister Bimala Rai Paudyel. “There is fear that Trump’s policies will push the world to become even more polarised than it is now.”
India and China will both be able to fill the gap left by Trump America’s retreat from global and regional leadership. They will be able to take advantage of Trump diluting relations with or abandoning traditional allies in Europe and Asia.
Although India is in the western camp, New Delhi has wanted to call its own shots. It is using its growing economic clout to thumb its nose at the EU and the US. For example, India has got away with importing oil from Russia despite western sanctions.
Says Akhilesh Upadhyay, Senior Fellow at the Strategic Affairs Center, IIDS: “From a traditional security perspective, Nepal is bang in the middle of China and India. China and America have a great power rivalry, and it is unclear which way Indian axis will go.”
India can also benefit if Trump follows through on threats on more tariffs on Chinese imports. Even though the Biden-Harris administration has been punishing China with tariffs and other barriers, Trump has in the past been more belligerent on Beijing.
“On the one hand, India is close to US in Quad, on the other hand, it takes part in BRICS where it works with Russia and China, and the Shanghai Cooperation. It remains to be seen how the US relationship plays out with our two big neighbours,” adds Upadhyay.
Since the enemy of an enemy is a friend, Washington has regarded India as its bulwark against increased Chinese economic and military clout. But New Delhi has not always gone along with US strategic interests, and does not really like the Americans being too involved with India’s smaller neighbours.
On the downside, A Trump administration could curb the influx of Indian IT workers in US, and the easy access Nepali students have to those jobs in the US could also be scaled back.
Some experts say which party is in the White House will not affect policy South Asia, and Nepal even less. But a Trump win could mean less development assistance to Nepal, particularly in reproductive health, human rights, and social safety.
Nischal Pandey at the Centre for South Asian Studies in Kathmandu says that the few state-level visits between the US and Nepal — from King Mahendra’s address to the joint session of US Congress during President Eisenhower tenure in 1960 to Ganesh Man Singh being received at the White House by President Bush Sr after 1990, to US Secretary of State Colin Powell’s visit in 2002 during George HW Bush’s term — have all been during Republican administrations.
He adds, “Historically, Republican presidents and administrations have been &nbsp;interested in Nepal than Democratic ones.”
More directly, Nepalis aspiring to migrate to the United States could find it more difficult. There are currently about 300 Nepalis waiting in Mexico for human traffickers to smuggle them into the United States, and that border is going to be tightened even more.
Earlier this year, Sao Paolo airport in Brazil had 150 Nepalis stranded after arriving to take the Darien Gap backdoor to the US. Another 200 headed out to Brazil were stuck at Addis Ababa airport, forcing Ethiopia to ban visas to Nepalis.&nbsp;
Trump has threatened a 20% tariff on Mexican imports if it does not stop migrants. He plans to deport 11 million undocumented people, he may not be able to carry it through but the threat is there for Nepalis in the US without papers.
Trump’s strong rhetoric on China could be bargaining brinkmanship, and it will be interesting to see how he balances this with Sino-Russian alignment. Biden did not roll back bans on Huawei and restrictions on TikTok, and US security concerns about China’s rise is a bipartisan issue, just as Gaza is. Harris would not have done things differently in those sectors.&nbsp;
Says MP Bimala Rai Paudyal: “Trump’s win could cause economic tensions with China, which will affect trade here as well, this is something we will need to prepare for.”
America’s moral authority to lecture countires like Nepal on transitional justice, human rights, democracy, and press freedom will be diminished during the second Trump term.&nbsp;
Reproductive rights, support for family planning projects in Nepal through the UN system may also fall like it did during his earlier presidency. Foreign aid through USAID could also be cut.
But perhaps the more indirect impact on Nepal of the Trump presidency will be his rollback on America’s commitment to curb climate change which will accelerate melting of the Himalayan icecap with major impact on water supply downstream in Asia.&nbsp;
“America’s climate commitments and goals will be impacted by Trump who doesn’t believe in climate change,” says Paudyal. “The current work on loss and damage, and carbon trading depends significantly on US funding, and the world looks to the US to be proactive.”
If Trump can bring the Ukraine war to a close by cosying up to Putin, a peace deal may improve fuel and food situation globally. There are thousands of Nepalis in the Russian Army, at least 50 have died, and they could finally come home.&nbsp;
Concludes Upadhyay: “As for Nepal, the Trump administration should see Nepal as a soverign nation on its own right rather than through the prism of great power rivalry either between US and China.”

Trumpet Call

Nepal and India are both Hindu-majority countries, but there is a difference between the Hindutva nationalism playing out in India’s ongoing elections and the Hindu faith as practiced in Nepal.
Most Nepalis are too busy trying to get by in hard economic times to be too engrossed with elections across the border. Some do harbour strong views about Narendra Modi’s brand of Hindu revivalism, and the RPP in particular seems to want to imitate the BJP’s ability to set a national Hindutva narrative.
Still, a majority of Nepalis look at Narendra Modi with something between indifference and fondness. The Indian Prime Minister has visited Nepal five times since he was first elected in 2014, and many here still remember his address to Parliament which he began in Nepali during his first state visit to Kathmandu.
There is a section in Nepal that supports a non-secular Hindu state, and Nepalis have noticed that every time Modi comes to Nepal he makes it a point to visit Hindu and Buddhist sacred sites. But in contrast to his BJP’s Hindu exclusionist policies in India, Nepal has traditionally enjoyed a syncretic blend of Hindu and Buddhist traditions.
Read also: <a href="https://nepalitimes.com/opinion/borderlines/the-south-wind-blows">The south wind blows</a>, Chandra Kishore
For most Nepalis, therefore, the affinity for BJP and Modi could be characterised as cultural rather than political. Most Nepalis still have memories of the hardships they suffered during the 6-month blockade that New Delhi imposed just after the 2015 earthquake because it did not like the contours of Nepal’s new draft Constitution.
The poor showing of the Hindu-monarchist Rastriya Prajatantra Party (RPP) in last month’s by-elections in Ilam and Bajhang shows that at least in the mountains, Nepalis are not so impressed with the polarised electoral politics on display in India. Interestingly, Bajhang is close to the Indian state of Uttarakhand which has declared itself to be a Hindu-only ‘Devbhumi’ and with which it has close cross-border cultural ties.
Although factions of the other four main parties in Parliament, the NC, UML, Maoist-Centre and the RSP, do flirt with the Hindu-monarchy line from time to time, there is not much public support for it yet and none of the four largest parties in Parliament has officially voiced its support for such an agenda.
When (and if) Modi does win a third term in India’s elections there could inevitably be ripple effects in Nepal — especially if the BJP’s mentors in the Rastriya Swayamsevak Sangh (RSS) adopt an even more radical agenda, abolish secularism from the Indian Constitution, or push the Greater India idea of ‘Akhanda Bharat’.
Read also: <a href="https://nepalitimes.com/here-now/india-s-faith-in-politics">India’s faith in politics</a>, Shrijan Pandey
Even so, rousing radical religious passions will not be as easy in Nepal, which is South Asia’s oldest nation-state and does not carry with it the historical baggage of Partition. Nepal’s Muslim minority which forms 5% of the population has for the most part lived in harmony with Hindus and Buddhists, although there are politically-instigated local flare-ups from time to time mainly along the southern border.&nbsp;
Though Nepal’s Hindu population is more than 80% (2021 census), Nepal as a whole is a country of minorities. The Hill-Brahmin and Chhetri may dominate the political and economic spheres, but they form less than 30% of the population. Nepal’s ethnic and indigenous groups have been asserting themselves, as seen in the recent Ilam by-election, where the UML’s Suhang Nembang comfortably beat the NC’s Dambar Bahadur Khadka by close to 6,000 votes. However, an independent candidate, Dakendra Singh Limbu, with no political affiliation, but who campaigned on a platform of assertive Limbu identity, made a strong showing, finishing third with 11,457 votes.
Such identity politics is more a response to ethnic exclusion and a demand for regional autonomy than pushing a religious agenda. Indeed, Nepal’s political parties have so far desisted from mixing religion with politics, even though some individual leaders in the parties sometimes seem to appear to be sorely tempted.
Nepal’s next general election is more than three years away, and India-style Hindutva politics could still be whipped up. For now, it seems more likely that it will be Nepali nationalism that will be a more potent vote-mobiliser.
This already seems to be happening, with the government minting Nepal’s new 100-rupee note that depicts the country’s ‘pointy map’ (‘chuchhe naxa’) showing a 350-sq km strip of territory in its northwestern tip which is also claimed by India.
Read also: <a href="https://nepalitimes.com/opinion/borderlines/crimson-saffron-and-green">Crimson, saffron and green</a>, Chandra Kishore
Akhilesh Upadhyay is former Editor-in-Chief of The Kathmandu Post and a Senior Fellow at the think tank, IIDS.

Southerly winds

Nowhere is Nepal’s delicate balancing act between its giant neighbours India and China as evident as it is in this tourism capital.&nbsp; The <a href="https://nepalitimes.com/here-now/pokhara-s-china-connection">Chinese have cultivated a special relationship with Pokhara</a> ever since they built the 200km Prithvi Highway connecting it to Kathmandu in 1974, right up to the inauguration of Pokhara International Airport last year. India has not been far behind: it financed the 181km Siddhartha Highway connecting Pokhara to Bhairawa in 1971, and a dam that raised the level of Phewa Lake. There are strategic reasons for India and China to eye Pokhara. Most <a href="https://nepalitimes.com/here-now/recruitment-of-nepalis-into-indian-army-paused">Gorkha soldiers in the Indian Army are sourced from these mountains</a>, and there is an Indian military pension centre here.&nbsp; For China, it is important to keep an eye on refugee centres here with thousands who fled Tibet after the Chinese annexation. Both India and China have an interest in who governs Nepal, and have followed (often meddled) with political developments in Kathmandu. A Nepali Congress-Maoist coalition that was seen by many to be India-leaning was <a href="https://nepalitimes.com/news/catapulting-to-singha-darbar">suddenly replaced on Monday with a Communist-led coalition</a> more amicable to China.&nbsp; However, it is Pokhara that is on the main geostrategic fault line between India and China, where the rivalry is openly played out. Pokhara’s mayor Dhana Raj Acharya is from the Communist Party of Nepal (Unified Socialist and has earned the moniker ‘Chinese mayor’ for pushing direct flights to Pokhara from Chinese cities, and activities like the Dragon Boat Festival on Phewa Lake, the China International Crosscountry Championship, and a full-scale celebration of Chinese New Year last month.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20240309010324_1a033dbd507869e172cfe184d622391defeaf39a1af0a4a4e1c6b60bd5d1a675.jpg" data-media-id="editor_3" data-image-id="20240309010324_1a033dbd507869e172cfe184d622391defeaf39a1af0a4a4e1c6b60bd5d1a675" data-rendition-name="original" width="3500" height="2333" loading="lazy" alt="Pokhara epicentre of Sino-Indian rivalry in Nepal"> <figcaption>Pokhara Mayor Dhana Raj Acharya with Chinese Ambassador Chen Song. Photo: DHANA RAJ ACHARYA/FACEBOOK</figcaption> </figure>  The Indians have been looking at this flurry of Chinese activity with some concern, and have organised their own events.&nbsp; The first international flight at Pokhara's new airport was a Sichuan Airlines jet from Chengdu in June flying in the Dragon Boat Festival crew. India has been dragging its feet on allowing direct flights between Pokhara and Indian cities because the airport was built by the Chinese. Read also: <a href="https://nepalitimes.com/here-now/pokhara-s-desperation-and-hope">Pokhara's desperation and hope</a>, Kanak Mani Dixit To make its point, the Indian Embassy organised a Yoga Day function on the same day as the inaugural Chinese flight. It was not a coincidence that both the Chinese and Indian ambassadors to Nepal were in Pokhara on the same day.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20240309010324_d07a2bdaa9fdff8dd3d9e585673b83f642e3bbf03dfc45d5b7bbec0d6cfbd55d.jpg" data-media-id="editor_5" data-image-id="20240309010324_d07a2bdaa9fdff8dd3d9e585673b83f642e3bbf03dfc45d5b7bbec0d6cfbd55d" data-rendition-name="original" width="1840" height="1292" loading="lazy" alt="Pokhara epicentre of Sino-Indian rivalry in Nepal"> <figcaption>A Sichuan Airlines Airbus 319 was the first international flight to the new Chinese-built Pokhara airport in June last year. Photo: XINHUA. It landed on the same day that the Indian Embassy organised Yoga Day at the nearby Pokhara Stadium (below).</figcaption> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20240309010328_ac491e7363d9a7ee6ff46ff926bcb29b0cc08aba0687d9c6d3d4bb5afa09318e.jpg" data-media-id="editor_6" data-image-id="20240309010328_ac491e7363d9a7ee6ff46ff926bcb29b0cc08aba0687d9c6d3d4bb5afa09318e" data-rendition-name="original" width="2250" height="1501" loading="lazy" alt="Pokhara epicentre of Sino-Indian rivalry in Nepal"> <figcaption>Photo: DHANA RAJ ACHARYA/FACEBOOK</figcaption> </figure>  &nbsp;On another recent visit to Pokhara, Indian Ambassador Naveen Srivastava made a pointed reference to the fact that Pokhara was connected to the Indian border (by the Indian built road in 1971) before it was linked to Kathmandu (by the Chinese-built road in 1974). He added that although Indian visitors liked to drive to Pokhara, they were facing difficulties because of the poor state of the Prithvi Highway.&nbsp; “I don’t know who is repairing that highway,” Ambassador Srivastava continued, referring obliquely to Chinese contractors, “but India has set a record in highway construction. Next time, also remember Indian companies.” Srivastava made no mention of India’s reluctance to allow flights to Pokhara, adding that most Indian visitors came by road anyway. Chinese Ambassador Chen Song also appeared concerned about the slow progress on the expansion of the Prithvi Highway, and drove along a part of it during a recent visit, posting drone footage of the upgrading work on social media. Read also: <a href="https://nepalitimes.com/news/begnas-going-the-way-of-phewa">Begnas going the way of Phewa</a>, Durga Rana Magar While in Pokhara, Ambassador Song also publicly criticised the Indian policy of not importing electricity from Nepali hydropower plants built by the Chinese. And to drive that point home, two Chinese Air Force Y-20 transport aircraft landed at Pokhara airport in November with 50 tonnes of relief for Jajarkot earthquake survivors.&nbsp; New Delhi insisted that the India-Nepal Bilateral Consultative Group on Security Issues be held in Pokhara in October.&nbsp; “The great game between India and China is being played out in Nepal, and Pokhara is where it is most visible,” explains geopolitics expert Indra Adhikari.&nbsp; She adds, “India is concerned about an increase in Chinese activity around Pokhara, and competition between Nepal’s neighbours is heating up.”&nbsp; India’s main sensitivity appears to be over the fact that Kaski and neighbouring districts of central Nepal are major recruitment centres for the Gorkha regiments of the Indian Army. The Gorkha Pension Camp was opened as far back as 1955 in Pokhara, and in 1987 it established a school for the children of Gorkha soldiers in its military.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2024031106034_a5c5037ae3a76c0443eca037a02d822494de1f60649e6f42466936fb3e632ddd.jpg" data-media-id="editor_8" data-image-id="2024031106034_a5c5037ae3a76c0443eca037a02d822494de1f60649e6f42466936fb3e632ddd" data-rendition-name="original" width="900" height="551" loading="lazy" alt="Pokhara geopolitics"> <figcaption>Indian Ambassador Navin Srivastav with mayor Acharya.</figcaption> </figure>  Similarly, China’s touchiness concerns the presence of British Gurkha veterans and their families living in Hong Kong, and Tibetans in four refugee camps in and around Pokhara.&nbsp; Pokhara was also the staging post for American and Indian military support for Khampa guerrillas who were fighting the Chinese Army in Tibet till they were disarmed or driven out in 1976. Explains analyst Ananda Raj Mulmi: “Beijing does not want Pokhara to once more become a base for anti-Chinese activities.” After opening the China-Nepal border at Korala in Mustang, the Chinese are keen to make Pokhara a trading hub in central Nepal.&nbsp; “The Chinese had a long term time horizon to link the Prithvi Highway to Korala, and wanted to extend the road from Pokhara to Jomsom but King Mahendra did not approve, so they just built it up to Baglung,” adds Mulmi.&nbsp; Pokhara’s sister city relations with eight Chinese cities is a source of soft power, and means there are frequent cultural exchanges. Pokhara is a household word in China because of the popular television serial Deng Feng Lai which was filmed on location here, and the main characters took a paragliding flight. <a href="https://nepalitimes.com/here-now/chinese-tourist-influx-to-nepal-in-2020-nqr538k3">Chinese visitors used to be the mainstay of Pokhara’s tourism till Covid</a>.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2024031106034_ff7c3ce0f0e3b2e83849bcdf35942892b9fb7e4f110ce6032920fd3e4ccd8094.jpg" data-media-id="editor_10" data-image-id="2024031106034_ff7c3ce0f0e3b2e83849bcdf35942892b9fb7e4f110ce6032920fd3e4ccd8094" data-rendition-name="original" width="976" height="665" loading="lazy" alt="Pokhara geopolitics"> </figure>  More than a year after the inauguration of Pokhara Airport, there are no regular international flights. India may be preventing flights to its cities, but it is Nepal’s failure that it has not been able to attract airlines to connect Pokhara to Chinese destinations.&nbsp; “This is because we went ahead and built an expensive airport without factoring in geopolitical sensitivities,” says foreign policy expert Krishna KC. “We have to convince the Indians that it is also in their interest to allow flights.”&nbsp; Chinese Ambassador Song announced at Pokhara Airport’s inauguration that it was a BRI project even though it predated the concept, and this ticked India off even more. Nepal’s unclear flip-flopping over the issue aggravated both sides, diplomatic sources say.&nbsp; Even so, most people here blame India for being petty-minded about not allowing new air routes making Pokhara operations feasible, as well as permitting connections to Indian cities.&nbsp; Professor of geostrategic studies Bhim Nath Baral says it is natural for both powerful countries to be concerned that Pokhara will be used against its national interest.&nbsp; “But it is up to Nepal to deploy diplomatic skills to understand and reassure both sides,” he adds. “That can only come with a mature and self-confident foreign policy.”

Pokhara epicentre of Sino-Indian rivalry

China’s sharp economic slowdown has raised alarm bells around the world. But it has also thrown into relief the rise of another demographic powerhouse next door.&nbsp; The Indian economy grew at an impressive <a href="https://www.reuters.com/world/india/indias-economic-growth-set-accelerate-its-fastest-year-2023-08-31/">7.8% annual rate</a> in the second quarter of 2023, and the country recently reached an important milestone by becoming the first to <a href="https://www.nytimes.com/2023/08/23/science/chandrayaan-3-india-moon-landing.html">land a spacecraft</a> on the Moon’s potentially water-rich south pole. India’s ascent, unlike China’s, has not been accompanied by an increasingly assertive foreign policy. As India’s geopolitical, economic, and cultural clout grows, so does its global footprint. China’s ‘<a href="https://www.nytimes.com/2023/08/29/opinion/china-economy-decline.html">decline</a>’, as some have begun to call the conclusion of the country’s four-decade-long economic boom, opens new opportunities for the Indian economy and other developing and emerging countries. Earlier this year, India reached another milestone when its population officially <a href="https://www.un.org/development/desa/dpad/publication/un-desa-policy-brief-no-153-india-overtakes-china-as-the-worlds-most-populous-country/">surpassed that of China</a>, which had been the world’s most populous country for <a href="https://www.nytimes.com/2023/04/19/world/asia/india-china-population.html">more than 300 years</a>. While China’s shrinking, <a href="https://www.scmp.com/economy/economic-indicators/article/3207047/china-population-2022-marks-first-population-decline-60-years">rapidly aging</a> population is likely to impede economic growth and may curtail its geopolitical ambitions, India – one of the world’s <a href="https://indbiz.gov.in/one-of-the-youngest-populations-in-the-world-indias-most-valuable-asset/">youngest</a> countries, with a <a href="https://www.worldometers.info/world-population/india-population/#:~:text=The%20population%20density%20in%20India,1%2C202%20people%20per%20mi2).&amp;text=The%20median%20age%20in%20India%20is%2028.4%20years.">median age of 28.2</a> – is poised to reap a huge demographic dividend. But the driving force behind India’s emergence as a major global power is its rapid economic growth. While India’s GDP is still smaller than China’s, the country is currently the world’s <a href="https://www.imf.org/en/Publications/WEO/Issues/2023/07/10/world-economic-outlook-update-july-2023">fastest-growing</a> major economy and is projected to account for <a href="https://t.co/SMFH21oTa0">12.9% of global growth</a> over the next five years, surpassing the United States’ 11.3% share.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231029081036_781e265ec0c9f72b3c2596697419554293b721f2c4e8c93b963d66e35f4aa3c1.jpg" data-media-id="editor_10" data-image-id="20231029081036_781e265ec0c9f72b3c2596697419554293b721f2c4e8c93b963d66e35f4aa3c1" data-rendition-name="original" width="696" height="477" loading="lazy" alt="India China graph NT"> </figure>  In addition to fueling a consumption boom, India’s youthful population is also driving innovation, as evidenced by the country’s world-class information economy and its recent moon landing, which the country managed to achieve despite a national space budget equivalent to <a href="https://www.wsj.com/world/asia/india-races-russia-to-be-first-to-land-on-moons-south-pole-ad5d9d05">roughly 6%</a> of what the US spends on space missions. Having already surpassed the United Kingdom, its former colonial ruler, India’s GDP is poised to <a href="https://www.cnbc.com/2022/12/01/india-to-leapfrog-to-third-largest-economy-by-2030.html">overtake</a> that of Japan and Germany to become the world’s third-largest economy by 2030, behind the US and China. Given its increasingly unstable neighborhood, it should come as no surprise that India has the world’s <a href="https://www.sipri.org/media/press-release/2022/world-military-expenditure-passes-2-trillion-first-time">third-largest</a> defense budget. The deepening <a href="https://asia.nikkei.com/Opinion/Pakistan-China-and-terrorism">strategic alliance</a> between China and Pakistan underscores India’s precarious position as the only country bordering two nuclear-armed <a href="https://www.project-syndicate.org/commentary/pakistan-becoming-chinese-client-state-by-brahma-chellaney-2016-05?">revisionist states</a> with expansionist ambitions. Moreover, for the past three years, India has been locked in a tense <a href="https://www.project-syndicate.org/commentary/china-cannot-win-india-himalayan-border-dispute-by-brahma-chellaney-2023-04">military standoff</a> with China along its Himalayan border. Bilateral relations, marked by <a href="https://www.washingtonpost.com/world/2022/12/12/india-china-arunachal-border/">intermittent clashes</a> in the disputed Tibet-Ladakh border region, are at their lowest point in decades. By confronting China despite the risk of a full-scale war, India has challenged Chinese power in a way no other country has done in this century. But despite leaning toward forging closer ties with the West, India remains hesitant to enter into formal military alliances with Western countries. Western powers are partly to blame. US President <a href="https://www.project-syndicate.org/columnist/joseph-biden-jr">Joe Biden</a>’s reluctance to comment on the Sino-Indian military standoff, let alone openly support India, has sent a clear signal that India is responsible for its own defense. Given that the country’s future growth hinges on its ability to defend itself against external threats, India will likely step up its efforts to modernize its conventional armed forces and enhance its nuclear deterrence. The escalating geopolitical rivalry between China and India could also impede efforts to unite the Global South and transform the BRICS group into a credible alternative to the G20 and G7. The BRICS countries (Brazil, Russia, India, China, and South Africa) recently agreed to expand the group by adding <a href="https://www.thepresidency.gov.za/content/xv-brics-summit-johannesburg-ii-declaration-24-august-2023">six new members</a>: Saudi Arabia, the United Arab Emirates, Egypt, Ethiopia, Argentina, and Iran. Given the 11 members’ divergent interests, BRICS+ will likely find it even harder to reach consensus on any major issue.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231029081040_43ee34df0da045fc9466deb8642e67e778412c7494d5aa1275da28fc08e002e9.jpg" data-media-id="editor_20" data-image-id="20231029081040_43ee34df0da045fc9466deb8642e67e778412c7494d5aa1275da28fc08e002e9" data-rendition-name="original" width="599" height="402" loading="lazy" alt="India China NT 2"> </figure>  Meanwhile, China’s economic slump could prompt President Xi Jinping to double down on his expansionist agenda. Biden recently <a href="https://www.nytimes.com/2023/08/11/us/politics/biden-china-criticism-economy.html">characterized</a> the stagnating Chinese economy as a “ticking time bomb,” warning that, “When bad folks have problems, they do bad things.” China’s controversial <a href="https://twitter.com/globaltimesnews/status/1696104724691570945">new national map</a>, which depicts vast areas of India, Malaysia, the Philippines, Vietnam, Taiwan, and Bhutan (and even a bit of Russia) as Chinese territory, underscores the threat posed by China’s increasingly aggressive behavior. In addition to these external threats, India’s future will be shaped by its response to domestic economic challenges. Prime Minister Narendra Modi has made <a href="https://www.nytimes.com/2014/10/12/world/asia/in-india-government-tracks-its-own.html">great strides</a> in modernizing the notoriously outdated Indian bureaucracy and promoting e-government to reduce red tape and attract foreign direct investment. His government has invested heavily in upgrading and expanding the country’s infrastructure, implemented regulatory reforms, and sought to boost domestic manufacturing through Modi’s <a href="https://mea.gov.in/Images/attach/Make_in_India_Initiative.pdf">“Make in India” initiative</a>. But to transform itself into a global manufacturing hub, India must invest in human capital, particularly in <a href="https://www.imf.org/en/News/Articles/2015/09/28/04/53/sp012202">education and training</a>. Moreover, India’s size and diversity also pose enormous challenges. India may be the first developing economy that, from the beginning, has pursued modernization and prosperity through a democratic system. But as one of the world’s most culturally diverse countries, its seemingly never-ending election cycle has often fueled division and polarization. But, despite its <a href="https://www.washingtonpost.com/world/asia_pacific/divided-families-and-tense-silences-us-style-polarization-arrives-in-india/2019/05/18/734bfdc6-5bb3-11e9-98d4-844088d135f2_story.html">US-style polarized politics</a>, India’s democratic framework has served as a pillar of stability. By fostering open expression and dialogue, the Indian political system has empowered grassroots communities and individuals, enabling members of historically marginalized classes and castes to rise to the highest levels of policymaking. Whether India can maintain its current upward trajectory will depend on its ability to maintain political stability, rapid economic growth, domestic and external security, and a forward-looking foreign policy. Success would enhance India’s <a href="https://www.project-syndicate.org/commentary/india-us-china-balance-of-power-without-formal-alliance-by-joseph-s-nye-2023-06">global standing</a> and help advance <a href="https://www.wsj.com/articles/can-india-emerge-as-a-rival-to-china-manufacturing-population-it-investment-trade-youth-regulatory-reform-11673895652?mod=opinion_featst_pos2">US interests</a> in the Indo-Pacific, the world’s new geopolitical fulcrum and home to its fastest-growing economies.&nbsp; © Project Syndicate Brahma Chellaney is Professor of Strategic Studies at the Center for Policy Research, New Delhi and Fellow at the Robert Bosch Academy in Berlin. His book <a href="https://press.georgetown.edu/Book/Water">Water: Asia’s New Battleground</a> (Georgetown University Press, 2011) for which he won the 2012 <a href="https://asiasociety.org/media/press-releases/brahma-chellaney%E2%80%99s-water-asia%E2%80%99s-new-battleground-wins-2012-asia-society-bernard">Asia Society Bernard Schwartz Book Award</a>.

India’s quiet rise

In an English city, my aunt had learned to call home, it was the pursuit of familiarity that really gave her the purpose to stay. One weekend, she sat on the stairs, making frantic calls. My uncle punched numbers on his Nokia cell phone. Where? What time? Are tickets available? They echoed one another. Both were trying to book tickets for the only screening of Bollywood’s <a href="https://www.imdb.com/title/tt0420332/">Veer Zara</a>, in a city near us.
My cousins and me, we waited with bated breath. This would be an opportunity to watch a Bollywood film on the big screen. In the early-2000s, screening of Bollywood in the cinemas had not yet become a thing in England, so South Asians would organise their own screenings.
Read also: <a href="https://nepalitimes.com/opinion/suburban-tales/light-of-the-absurd">Light of the absurd</a>, Pratibha Tuladhar
Tickets were finally booked and we rushed out, thrusting our arms through our coats as we hastily locked the door behind us. “This is as far as Nagarkot is from Kathmandu,” my uncle said aloud, as he drove. Would we have covered the same distance to go watch a “Hindi” film in Kathmandu? Probably not. But in the UK, we did, racing towards a collective, South Asian sentiment.
When we arrived, the theatre premise was packed with Indians, Pakistanis, Bangladeshis and Nepalis. Immediately, there was the relaxing of the muscles you experience in the presence of the familiar.
Probably among the last people to buy the tickets, ours weren’t the best seats. We were on the very first row, and for the rest of the show, we would tilt our head up towards the screen, as though clamouring for some love, while the actors would virtually breathe down our necks.
Read also: <a href="https://nepalitimes.com/opinion/suburban-tales/memory-of-a-conversation">Memory of as conversation</a>, Pratibha Tuladhar
We weren’t the only ones with bad seats. Some in the audience had been accommodated on make-shift chairs. The auditorium was packed all the way to the exit.
As <a href="https://www.imdb.com/name/nm0451321/?ref_=tt_ov_st">Shah Rukh Khan</a> rescued <a href="https://www.imdb.com/name/nm0006689/?ref_=tt_ov_st">Priety Zinta</a> by slinging on a chopper, I remember flinching in my seat, as though they would fall on my face. A Nepali family friend, Mahesh Mahaseth, who happened to be sitting next to me, nudged and laughed at me when tears ran down my face as the India-Pakistan romance transpired. I remember thinking at that time how cruel-South-Asian-male that behaviour was-- teasing a girl in tears.
Even as my dislike for Shah Rukh Khan (SRK) continued to build-up, I joined other women and girls in the audience and cried during all the sad scenes. The men cleared their throat. And although it seemed like SRK was demonstrating that it is okay for men to weep, to be vulnerable and heartbroken, that precedent wasn’t quite set off screen.
Regardless, we all went home purged. Post-catharsis.
…
For many South Asian women, SRK is religion, said my friend Ayub, and sent me a snapshot of the book, <a href="https://www.amazon.com/Desperately-Seeking-Shah-Rukh-Independence/dp/9354891934">Desperately Seeking Shah Rukh by Shrayana Bhattacharya</a>. Ayub described SRK as “the resilient embodiment of liberalism.” I asked him to elaborate and we ended up hate-watching <a href="https://www.imdb.com/title/tt15354916/">Jawan</a>. (Was he a convert by the end of the film? He might answer that in a separate article.)
Read also: <a href="https://nepalitimes.com/opinion/suburban-tales/the-light-of-feet">The light of feet</a>, Pratibha Tuladhar
I cannot remember the last time I watched a Bollywood movie in the theatre. So, when the audience cheered and clapped every time SRK dismantled a bad guy, I was surprised. And while the audience responded in euphoria, I found that I was quickly disassociating: what was this film beyond a family drama steeped in violence, a revenge tragedy interlude, and family reunion with the Robin Hood of a son, all woven into the narrative of vindication of geopolitics? But the show was house-full and parents had their toddlers in tow.
There are no sanitised versions of the world here, for children.
“I was not expecting so much crowd for a Bollywood masala movie. I was surprised to be honest,” Hashim Ahmad Hakeem, video producer from India, who went to the film’s screening in Kathmandu with friends from South Asia, told me. “It was amazing bonding over the movie and realising most of us have grown up in the same Bollywood cinema.”
Hakeem was participating in the Adenauer Media Leaders Academy in Kathmandu. On the sidelines of the event, one of the things the fellows did together was watch Jawan.
Read also: <a href="https://nepalitimes.com/opinion/suburban-tales/of-anger-and-love">Of anger and love</a>, Pratibha Tuladhar
“I watched it because Bollywood movies are banned in Pakistani cinemas. Secondly, I wanted to watch with fellows from other countries, specifically India as they are very much enthusiastic about Shah Rukh Khan. So, I enjoyed their cheering more than the movie,” says Abbass Raza, an aspiring journalist from Pakistan.
For many South Asians, Bollywood movies are about coming home to culture and language they can relate to.
“Honestly, this will always be memorable,” says Navneeta Nandan, journalist with The Economic Times. “It signifies the strength of art. We can be geographically apart but this can always be something that will keep us connected- cinema, music from different countries.”
…
On a certain terrace restaurant in the heart of Kathmandu, a friend from Pakistan and I get talking about architecture and end up discussing Pakistani teleserials. In the 80s, Nepal Television used to broadcast Pakistani series as an endorsement of its friendly relations with Pakistan. Some viewers at the time, even named their children after their favourite characters.
My aunt who lives in an English city, which has become her home, still binges on Pakistani series and records Indian serials. In the solitude of a foreign land, content in languages she can speak have always been her friends.
Read also: <a href="https://nepalitimes.com/opinion/suburban-tales/a-letter-to-a-sister">A letter to a sister</a>, Pratibha Tuladhar
Soap operas were created for housewives, who would watch them after putting their day’s work to rest, as though visiting old friends in the emptiness of their days. While on weekends husband and children filled the hours, on weekdays, they would go back to conversing with their virtual friends: women who sometimes did not represent their reality, and sometimes, offered them the comfort of heroism.
At my request, my friend from Pakistan shared a very long list of recommended Pakistani dramas. I forwarded it to my aunt. And here’s what she wrote back: Thank you, chhori. I have watched ALL of them! :)

Pratibha Tuladhar

Navigating invisible borders

Libya, Greece, Spain, China — videos of catastrophic floods have flooded the international media.&nbsp; Floods swept away most of the Libyan city of Derna, killing more than 11,000 people. Climate change was blamed, but it was also caused by war and unheeded warnings about weak dams. The disasters are a warning to Nepal where a range of factors could worsen monsoon flooding in the coming years. The Melamchi flood in 2021 that nearly destroyed Nepal’s largest infrastructure project, and this monsoon’s destructive floods in eastern Nepal show that these disasters are already happening.&nbsp; But every monsoon there is also a flood of recrimination in India about Nepal releasing water on its rivers and unleashing floods — even though there are no reservoir projects and sluice gates on two border barrages on the Kosi and Gandaki, both controlled by India. &nbsp; Yet, every monsoon the media in the Indian states of Bihar and Uttar Pradesh are full of headlines blaming Nepal.&nbsp; Read also: <a href="https://nepalitimes.com/news/the-kosi-returns-to-its-old-ways">The Kosi returns to its old ways</a> The 2008 flood that affected 2.3 million people in Nepal and India was actually caused by a breach in the eastern embankment of the Kosi. The rain that year was not even heavy, so one wonders what would happen in a year when there is abnormal precipitation in the Kosi catchment.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2023092204098_d8c61f36859d2d0f2aef053ea1c5a15358d618a3d8b2e772dba7ba06e8d38e0b.jpg" data-media-id="editor_1" data-image-id="2023092204098_d8c61f36859d2d0f2aef053ea1c5a15358d618a3d8b2e772dba7ba06e8d38e0b" data-rendition-name="original" width="2500" height="1667" loading="lazy" alt="Kosi NT"> <figcaption>Photo: GOPEN RAI</figcaption> </figure>  “After the completion of Kosi Barrage in the 1960s, the embankments have collapsed about eight times until now, but the major one was 2008,” says Ajaya Dixit, a water expert.&nbsp; In 2008, the Indian media had ill-informed headlines like ‘Nepal opened the Kosi Barrage’ which has affected public opinion. The real story is about faulty engineering of the barrage and its embankments on the Kosi, which is a river with one of the highest sediment loads in the world. Eklavya Prasad, water campaigner who is with Megh Pyne Abhiyan in Bihar, says it is unreasonable to blame Nepal for annual floods in India. He explains: “Geographically, a large number of Himalayan rivers flow down from Nepal and discharge the waters and sediment into the north Bihar region. It is a natural drainage path that flows across the international boundary and beyond human capabilities.” Read also: <a href="https://nepalitimes.com/here-now/the-kosi-s-sorrow-and-scope">The Kosi’s sorrow, and scope</a>, Kanak Mani Dixit Kosi, also known as Sorrow of Bihar, is notorious for frequently changing its course. In the last 200 years, the Kosi has gradually shifted 120km westwards. “River always chooses the path of least resistance. And when it doesn’t get to flow, it forces its way through,” says Dixit.&nbsp; Ignoring this nature of the river when infrastructure and new settlements are designed on old floodplains is what has increased the intensity and impact of floods. In many ways, it is the same reason Kathmandu gets flooded every monsoon. Infrastructure has been sited along floodplains constricting rivers such that even moderate rain becomes destructive. “All of the 56 floodgates of the Kosi Barrage are operated by the Bihar government, and if they fail to open the Nepal side is flooded. If they are opened, the flood goes downstream,” says Dwarika Nath Dhungel, former secretary of the Ministry of Energy, Water Resources and Irrigation. Read also: <a href="https://nepalitimes.com/here-now/the-geopolitics-of-nepal-s-water-and-electricity">The geopolitics of Nepal’s water and electricity</a>, Ramesh Kumar Although there is no clear clause on the operational right of the barrage in the agreement between Nepal and India, on the Kosi Project, Dhungel surmises that a subclause is being used by India to manage the barrage. Says Dhungel: “The same clause also uses the word 'maintenance' of barrage here, but there has been no maintenance effort from the Indian side.” The barrage impounds water forcing the river to deposit its sediment behind it so that the river is now flowing a few metres above the surrounding land — increasing the dangers of floods.&nbsp; The solution to transboundary floods is to look at the river system in totality. If India and Nepal are to prepare for cataclysmic water disasters in the future, the two countries must work together. The ‘national interest’ in harnessing Nepal’s rivers must be based on bilateral benefit. Says Ajaya Dixit: “Studying the nature of the rivers, not just where it floods but also from where it originates, and incorporating these elements while building infrastructure can minimise the risk of river-related disasters.” Read also: <a href="https://nepalitimes.com/here-now/india-nepal-ignore-climate-crisis-in-river-talks">India, Nepal ignore climate crisis in river talks</a>, Ramesh Bhushal

Pinki Sris Rana

A flood of recrimination

This is the first instalment in a new limited series in Nepali Times on the historic transportation infrastructures of Nepal. Nepal’s Forest Railways As<a href="https://nepalitimes.com/here-now/india-s-border-trains-that-connected-nepal"> India’s railway network </a>expanded in the 1890s and 1900s, the demand for wooden railway sleepers, called ‘ties’ in America, likewise increased. The <a href="https://archive.nepalitimes.com/article/Nepali-Times-Buzz/the-rana-reign-a-recap-of-history,3751">Rana regime</a> realised that western Nepal’s dense forests, from which sal trees could be extracted and sold, represented a valuable source of revenue. There was a problem of accessing large tracts of <a href="https://nepalitimes.com/here-now/the-tarai-s-shrinking-forests">Tarai forests</a>. However, once Indian railway lines are extended to Nepal’s border in several places, this issue could be resolved by constructing logging railways, also known as ‘tramways’ or ‘light railways’. The Nepal Government awarded a contract to Punjabi timber contractors to supply 15,000 sal sleepers to Chandan Chauki station of India’s Oudh &amp; Rohilkhand State Railway in 1908. The contractors also received a concession to construct a steam tramway to run 48km into <a href="https://nepalitimes.com/banner/reviving-nepals-community-forestry-success-story">Nepal’s forests</a> for cutting and transporting trees. The author found no records, however, indicating that such an ambitious tramway was built in 1908. The hewn logs were probably carried into India by bullock carts or <a href="https://nepalitimes.com/news/elephants-become-white-elephants">elephants</a>. The earliest known forest railway in Nepal was built in 1914 in the southwestern corner of the present-day Parsa district. A British engineer went to the Indian border town of Bikna Thori to plan a 4-mile portable light railway for the transport of timber from <a href="https://nepalitimes.com/here-now/on-the-tri-junction-of-wildlife-conservation-conflict-and-co-existence">the forest of Chitwan </a>to the Thori depot on the Bengal &amp; Northwestern Railway. This short line was laid upon wooden sleepers, and its rails could be taken up and repositioned when logging in one section of the forest was completed. This forest railway was in operation at least through 1917.&nbsp; A few year down the line in 1923, J V Collier of the Indian Forest Service built a narrow-gauge railway in Kailali district also to export of timber to India. This line, the Nepal Government Forest Railway, departed Chandan Chauki in Uttar Pradesh and ran 48km northwest into Nepal.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250824150820_84ddef57433c2f847b2c7e56c2d9c924084b6e6a504bbca905d2c593fac8eabd.jpg" data-media-id="editor_6" data-image-id="20250824150820_84ddef57433c2f847b2c7e56c2d9c924084b6e6a504bbca905d2c593fac8eabd" data-rendition-name="original" width="1130" height="689" loading="lazy" alt="Nepal's little railways"> <figcaption>A Nepal Government Forest train in Kailali District hauling sal sleepers in 1925. Photo: DAVID CHURCHILL </figcaption> </figure>  It was a 2-foot railway supported by 11kg rails. The line was ‘temporary’ in that as sal trees were thinned out in one area, railway tracks were shifted to uncut areas of the forest. The railway crossed seven small <a href="https://nepalitimes.com/here-now/saving-what-is-left-of-himalayan-rivers">rivers</a>, but the bridges were taken down during the summer and monsoon. Trains ran only from November to April. This forest railway purchased four 4-6-0T ‘tank’ engines built in Leeds, England. Each bogie could carry 100 broad-gauge sleepers, and two engines were needed to haul a 21-car train loaded with 2,100 sleepers. This huge commercial forest operation once employed about 14,000 men, most of them Indians. During one season, nearly 800,000 broad and metre-gauge sleepers were exported to India. When India suffered a depression in 1930, large scale operations came to an end. Read also: <a href="https://nepalitimes.com/news/rust-in-peace?fbclid=IwAR1_eg88TCOS6RGRW1af7WvaWx5mzh_rY8-vT1MnJxSs41QtCpaA988oXk8">Rust in peace</a>, Daniel W Edwards  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250824150828_13a0b894b9ea0c478904d358028f0c976d84f284432ee25106787366598d38e5.jpg" data-media-id="editor_9" data-image-id="20250824150828_13a0b894b9ea0c478904d358028f0c976d84f284432ee25106787366598d38e5" data-rendition-name="original" width="6000" height="4000" loading="lazy" alt="Nepal's railways"> <figcaption>Rails extended north from this spot into the virgin sal forests of Bardia in western Nepal 100 years ago.  DANIEL W EDWARDS</figcaption> </figure>  A third railway was built in <a href="https://nepalitimes.com/here-now/the-big-bulls-of-bardia">Bardia </a>where some scattered rails and signs of an old roadbed were seen in the 1960s. It ran from Nishangada in India to Khairbhatti in Nepal. From there, stations heading south were Ranipur, Karmak, Taratal and Madhuwan. Collier likely <a href="https://nepalitimes.com/here-now/nepal-train-project-struggles-to-stay-on-track">built this railway </a>as well in the 1920s. An elderly man in Bardia in 2022, whose father had worked on this forest railway, was interviewed for this account. Kathmandu Valley’s Motor (Trolley) Railway Merchants importing goods from India via the<a href="https://archive.nepalitimes.com/article/business/ropeways-connecting-nepal,1749"> ropeway</a> Chandra Shamsher built in 1927 had to go to the ropeway’s terminus at Matatirtha near Thankot to claim their goods and then haul them 6km to the customs house Bhansar Adda at Teku for clearance and payment of customs duties. The Motor Railway was built to carry goods from the<a href="https://archive.nepalitimes.com/news.php?id=16839"> ropeway station </a>directly to the customs office, making it cheaper and more convenient for merchants to receive their shipments. In December 1931, Prime Minister Bhim Shamsher issued an order (sanad) putting Lt Gen Singha Shamsher Rana in charge of building this rail line to Teku and on to ‘Nabalak Khana’ in Tripureswar, a distance of 10km. The project was subdivided into four sections or ‘phant’, and for each, budgets and timelines were established. There was bato phant (constructing the roadbed), lik sleeper and jordne phant (laying sleepers and joining the rails), culvert phant (installing culverts) and pul phant (building bridges). Colonel Kishore Narsingh Rana was put in charge of the sleeper and rail section, while Colonel Dilli Jung Thapa, an engineer at Ghar Kaj Adda, also was involved. The Motor Railway was completed by the end of 1933. In the beginning, the railway’s small wagons may have been pulled and pushed by men and bullocks. However, in 1938 a British railway manufacturer sent Nepal a four-wheel, 5½ ton, 2-foot narrow-gauge diesel-powered locomotive with mechanical transmission, hence the name motor railway. Read also: <a href="https://nepalitimes.com/latest/nepal-railways-janakpur-test-drive?fb_comment_id=3554227181262227_4263866616964943">Nepal Railways Janakpur test drive</a> Leaving Matatirtha, the trains passed Satungal, Naikap, the Bishnudevi Temple, crossed an iron bridge over Balkhu Khola, then to Ghattepakha, Sunagau, through what is now a section of Kuleshwor (‘Lik Marg’) to the Customs Office at Teku.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250825020852_033f0cee9775d7dadde7811132f84da876f614c386e3677e560ba7aed79909d9.jpg" data-media-id="editor_15" data-image-id="20250825020852_033f0cee9775d7dadde7811132f84da876f614c386e3677e560ba7aed79909d9" data-rendition-name="original" width="2000" height="1333" loading="lazy" alt="railways in Nepal"> <figcaption>Lik Marg in Kuleswor, the former route of the Motor Trolley Railway. Photo: DANIEL W EDWARDS</figcaption> </figure>  In 1945, Motor Trolley had four engines, but spare parts was badly needed. The charge for transporting one maund (about 40kg) of cargo from Matatirtha to Teku was 50 paisa. Even though the trains ran slowly and only for a short distance, <a href="https://nepalitimes.com/news/fatalism-and-fatalities">accidents were not unknown</a>. A train loaded with rice, salt and cotton derailed on a curve in July 1946, and two railway employees were crushed under the cars and killed, five others were injured. Besides the driver and a brakeman, guards rode the trains to prevent theft of goods.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250824150836_63a327d4db3b067a23dd5c6cf17a31ffe811ffd4a8429bc31011d62298a90060.jpg" data-media-id="editor_17" data-image-id="20250824150836_63a327d4db3b067a23dd5c6cf17a31ffe811ffd4a8429bc31011d62298a90060" data-rendition-name="original" width="6000" height="4000" loading="lazy" alt="Nepal's railways"> <figcaption>The author by the remains of the Balkhu Khola bridge built in 1932 with American steel. Photo: JEEVAN NEPAL</figcaption> </figure>  By 1953, government budget estimates indicated the Motor Railway would break even with an income of Rs70,000 against Rs71,000 in expenditure. It appears the railway stopped service around 1957 with the opening of the Raj Path and the extension of the ropeway from Matatirtha to Bhansar Adda. Bent steel beams of the bridge across Balkhu Khola and two plaques recovered from the river a few years ago are the only remains of this railway today. Photos of the Motor Trolley Railway in operation are hard to come by.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250825020848_3a7cd17d0ffc36bbf5fdad404f5f6e91c7aa0e4f4ed729ed2c7e9c186f32ca9b.jpg" data-media-id="editor_18" data-image-id="20250825020848_3a7cd17d0ffc36bbf5fdad404f5f6e91c7aa0e4f4ed729ed2c7e9c186f32ca9b" data-rendition-name="original" width="5189" height="1979" loading="lazy" alt="railways in Nepal"> <figcaption>Steel plaque commemorating the construction of a Motor Trolley bridge across the Balkhu Khola. Photo: DANIEL W EDWARDS</figcaption> </figure>  The Kosi Project Railway (KPR) As early as 1941, India and Nepal considered building a dam on<a href="https://nepalitimes.com/here-now/the-kosi-s-sorrow-and-scope"> the Kosi River</a> to prevent destructive floods caused by <a href="https://nepalitimes.com/editorial/when-it-rains-it-pours-ksqprbu3">monsoon rains</a>. Floods in 1950 inundated 500 villages in Bihar and left 500,000 people homeless. The two governments signed an agreement in 1954 to build a barrage on the Kosi, and King Mahendra and Prime Minister Nehru laid the foundation stone in April 1959. To transport stones from a quarry near Dharan to use in mixing concrete at the construction site, the Indian government, in charge of building the barrage, made plans to build a narrow-gauge railway linking Bihar and its border town of Bhimnagar with Nepal’s settlements at Chakraghatti, Chatra and Ghopa, the outskirts of Dharan.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250824150816_fc5e13b01022c63c64f1e83589da0015eee7ecd002bdd3d97b88c98c1f3d45b7.jpg" data-media-id="editor_21" data-image-id="20250824150816_fc5e13b01022c63c64f1e83589da0015eee7ecd002bdd3d97b88c98c1f3d45b7" data-rendition-name="original" width="4011" height="2645" loading="lazy" alt="Nepal's railways"> <figcaption>Steel plaque commemorating the construction of a Motor Trolley bridge across the Balkhu Khola. Photo: DANIEL W EDWARDS</figcaption> </figure>  The section of the KPR in Nepal totaled 66km — the country’s longest railway to date. The stations south of Chakraghatti were Rajabas, Maduhuwan, Kushaha, Haripur and Bhantabari. The line built, operated and owned by the Indian Government, was opened in 1958 and known locally as Dhunge (stone) Rail. Procuring locomotives, wagons and other materials was a challenge. India’s Railway Board searched the country for old 41 lb rails, and located steam engines, most built around 1910, in poor condition, and stored in ‘retirement’. These decrepit locomotives were later cannibalised for parts to keep the remaining engines running, and six newer locomotives built in Yugoslavia were sent to the KPR in 1960 to prevent the railway from shutting down and halting construction of the barrage.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250824150832_fd644f9e2674c5047a531de5dfeb2c8860b0f93dddc7a2df3db867bf31b2c94b.bmp" data-media-id="editor_22" data-image-id="20250824150832_fd644f9e2674c5047a531de5dfeb2c8860b0f93dddc7a2df3db867bf31b2c94b" data-rendition-name="original" width="3171" height="2069" loading="lazy" alt="Nepal's railways"> <figcaption>KPR locomotives, water tank and staff at Chakraghatti in Nepal. Photo: JOHN BENSON</figcaption> </figure>  Used bogie-wagons (gondolas) came from <a href="https://nepalitimes.com/here-now/india-nepal-rail-diplomacy">Indian railways</a> that had been converted to metre-gauge, others were manufactured in Muzaffarpur without couplers due to the non-availability of steel. A hundred new wagons arrived from Japan, but only half could be put in service, as couplers from the other 50 were removed and attached to the Muzaffarpur wagons. This smorgasbord of equipment kept shop mechanics and work crews busy, but now-abandoned railways in Nepal always operated under less-than-ideal conditions. Although the purpose of the KPR was to transport gravel, stones and boulders to the site of the barrage, photographs show people riding in loaded wagons. Excluding Dharan, there was no bus service through the wild animal infested jungle between Dharan and Chakraghatti or along the dusty paths linking other small villages on the KPR, so patient locals sat in wagons at Dharan, waiting perhaps for hours for trains to depart.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250825020852_7d011dcc8e9b8cb0fe745b352486ebc4a84dac99419eadb35875333db20837c6.jpg" data-media-id="editor_24" data-image-id="20250825020852_7d011dcc8e9b8cb0fe745b352486ebc4a84dac99419eadb35875333db20837c6" data-rendition-name="original" width="3965" height="2659" loading="lazy" alt="railways in Nepal"> <figcaption>Ticketless riders on a train of gravel and stones in the forest between Dharan and Chakragatti in 1966. Photo: JOHN BENSON</figcaption> </figure>  Sons of former railway workers in Chakraghatti say that there were no fixed schedules, three or four trains ran both ways daily in the early 1960s. Southbound trains carried gravel, stones and boulders, while northbound trains would carry coal, cement and provisions, including sacks of coins to pay the workers. Trains even ran at night, and the crews worked long hours. Workers received free housing in project-built tenements but had to buy food supplies and items for personal use. The Babu Saheb or the superintendent lived at Chakraghatti, and at one time supervised more than 1,000 employees, nearly all of them from India. The barrage was completed in 1964, but by 1970, the Kosi Project Railway had passed into history. Daniel W Edwards was a Peace Corps volunteer in 1966 and is the author of several books on Nepal.

Nepal’s five little railways

It was 30 years ago this month that investment into ‘Baby Arun’, the 201MW first phase of the run-of-river Arun III project, was brought to a screeching halt when the World Bank officially withdrew its support. This brought about profound and fundamental changes in the way Nepal’s power sector subsequently developed. Nepalis suffered debilitating power outages between 2008-2016 due to shortages attributable to the cancellation. At the same time, the gap left by Baby Arun was filled by private sector investment in ways that were not obvious in 1995. It took 30 years, but in many ways Nepal’s power sector is more healthy today than it has ever been, and likely better than if the project was built as planned. At a projected budget of $1.08 billion, Baby Arun would have cost the equivalent of Nepal’s entire annual government expenditure in 1995. It was to be funded by concessional grants and loans from multilateral and bilateral funders, including the World Bank, Asian Development Bank (ADB), KfW, and investment by the government itself. At the time, Nepal’s total electricity generation capacity was only 230MW, and the trajectory of the power sector changed dramatically following the cancellation. In the past 30 years, $5.4 billion has been invested in the power sector led by private investors, and much of it from domestic banks and pension funds (table, right).  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829150840_c13d6f9f34d7163832b3089eabdad6f20d2d5cef3a53039e0432add2be6c32f0.jpg" data-media-id="editor_0" data-image-id="20250829150840_c13d6f9f34d7163832b3089eabdad6f20d2d5cef3a53039e0432add2be6c32f0" data-rendition-name="original" width="984" height="521" loading="lazy" alt="30 years after Baby Arun"> </figure>  Nearly 70% of the new megawatts generated were by private independent power producers (IPP) in the past 30 years, while the Nepal Electricity Authority (NEA) and its subsidiary companies added 30% of new capacity. Almost 80% of total debt financing came from domestic banks and employee retirement funds. International assistance for power generation dropped dramatically over this time, accounting for only about 15% of investment. Before 1995 new power projects used to be entirely dependent on foreign aid. Since 1995, 63% of new generation came from 171 small hydropower projects with an average capacity of 12MW, while 4% was from 21 solar photovoltaic and biomass projects developed by local IPPs.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829150844_5bc299fc78be90b95ce4727b0b3bdaa4542e17e126718cc8725d136630ffc097.jpg" data-media-id="editor_1" data-image-id="20250829150844_5bc299fc78be90b95ce4727b0b3bdaa4542e17e126718cc8725d136630ffc097" data-rendition-name="original" width="988" height="503" loading="lazy" alt="30 years after Baby Arun"> </figure>  Over three decades, investment in Nepal’s power supply came primarily from new actors that had never before been involved in this sector. The rate of electrification rose from 10% to close to 100% -- sufficient to meet domestic needs during most of the year, and in 2024 made Nepal a net exporter of power to India for the first time in its history. As practically all the new investment in this period went into run-of-river hydro and solar projects, rather than into hydropower reservoirs with seasonal storage, Nepal continues to rely on imports from India during the dry winter months. Surplus electricity generation for export during the monsoon is slated to grow rapidly as another 200 solar and hydro projects are nearing completion of construction, with over 5,000MW of power capacity. Private Power The cancellation of Baby Arun inadvertently accelerated the entry of the private sector into Nepal’s power generation. The government enacted the Electricity Act in 1992 to attract private IPPs and diversify away from total dependence from international aid, but had been struggling for several years to conclude the first agreement with the 60MW Khimti Project. There remained a large gap between the tariff that the government thought was reasonable versus what was demanded by the Norwegian investor Statkraft, and the private sector arms of the World Bank and ADB that were financing the project. The shock of World Bank withdrawal from Baby Arun put tremendous pressure on the government, then led by the UML as it is now. The Bank’s decision to terminate its involvement was ostensibly, at least partially, taken in response to a letter critiquing the project sent by the UML while it was in the opposition.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829150848_7fb3641d776fe86a09ad60a758f7e16660a409fdb15e541644f13646b0894347.jpg" data-media-id="editor_2" data-image-id="20250829150848_7fb3641d776fe86a09ad60a758f7e16660a409fdb15e541644f13646b0894347" data-rendition-name="original" width="949" height="446" loading="lazy" alt="30 years after Baby Arun"> <figcaption>BAD NEWS: Newspaper clippings from the early 90s on tender announcement ahead of loan approval (left) and secrecy surrounding environmental assessment (centre) of Arun III before its eventual cancellation in August 1995.</figcaption> </figure>  The government was forced to soften its position and agree to the investors’ terms following the cancellation of Baby Arun. It directed NEA to sign a power purchase agreement (PPA) with Khimti. It was concluded in January 1996, and this was followed by a second PPA in July 1996 with Panda Energy, the American developer of the 45MW Upper Bhotekosi project. The expensive USD-denominated agreements to buy power from two international private producers, with price escalation clauses tied to the New York Consumer Price Index, sent alarm bells ringing. There was worry that the country was heading towards unaffordable tariff rates for the consumer and potential bankruptcy for NEA as a result of inevitable future weakening of the Nepali Rupee. The government had strong-armed NEA into signing these agreements, and realised that concessionary financing terms that Nepal was used to receiving for public sector projects such as Baby Arun and Kali Gandaki A, that included below-market interest rates and 40 years repayment period with a 10 year grace period before starting repayment, were not the norm for private sector investors. Nepal’s status as a less than attractive destination for foreign investment meant that the country had few options but to accept expensive dollar PPAs from international developers with the high commercial interest rates and short repayment periods imposed by their banks because of high investment risks. In the end, the government ended up having to additionally provide a sovereign guarantee in order to close the deal at the insistence of the lenders – committing it to repayment in case NEA defaulted on paying the IPPs. It is reasonable to assume that the extraordinarily high political cost of agreeing to the PPA terms would have meant that no government would have willingly agreed to them in 1995 had it not suffered the trauma of the loss of concessionary-financed public sector projects as large as the Baby Arun. It has taken NEA 25 years to consider offering dollar-denominated PPAs again: to cover the foreign exchange portion of the investment in the 216MW Upper Trisuli-1 and 120MW Rasuwa-Bhotekosi Hydropower projects. It seemed unlikely at the time, but it turned out that the dire situation Nepal found itself in 1995 planted the seed to mobilise investment for affordable power from within the country. Double Whammy After the dual shock of first losing investment in Baby Arun and having to sign expensive power purchase agreements with international IPPs, the first proposal for an alternative strategy to mitigate the risk of foreign currency investment into hydropower projects came from a group of engineers within the Arun III team at NEA. Led by <a href="https://archive.nepalitimes.com/news.php?id=4900">Deputy Director Damber Bahadur Nepali,</a> engineers convinced the leadership that NEA needed to invest in a subsidiary company to build a series of locally-designed and domestically-financed projects that would have lower cost with rupee-denominated PPAs. They registered the Chilime Hydropower Company Limited (CHCL) in October 1995 with 51% shares from NEA, 25% from its employees, and 24% available for the general public, 10% of which was prioritised for local residents at the project site. The 22.1MW project is in Rasuwa on a tributary of the Trisuli, and mobilised debt financing from the Employee Provident Fund, which manages retirement savings for employees of the government, public enterprises, and private sector institutions. CHCL’s experience showed that NEA employees themselves believed that individual hydropower projects with operational independence from NEA could be developed profitably in Nepal by its own engineers -- and they were willing to put their own money on the line. Chilime also demonstrated that there was money in the country, particularly with retirement funds, looking for opportunities for long-term investments. Following completion of Chilime in 2003, CHCL led the formation of three other NEA subsidiary companies that completed construction in 2023 and 2024, producing 168.3MW using fully rupee-tied investment. NEA’s largest subsidiary, the Upper Tamakosi Hydropower Limited, completed construction of its 456MW plant in 2021.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829160812_ce9ab8b49c598970db3f5bf0a079061ef52f153b28d9f4ead2bb1b26bfd7c2f3.jpg" data-media-id="editor_4" data-image-id="20250829160812_ce9ab8b49c598970db3f5bf0a079061ef52f153b28d9f4ead2bb1b26bfd7c2f3" data-rendition-name="original" width="3000" height="1571" loading="lazy" alt="30 Years after Baby Arun"> <figcaption>DAMNED: The $700 million 456MW Upper Tamakosi built entirely with domestic funds before it was destroyed by the September floods last year. </figcaption> </figure>  There were some delays and cost overruns on this run-of-river project, the largest in the country with a final cost of over $700 million -- all of it sourced domestically. The five subsidiary companies launched by NEA have produced almost two times as much new power as NEA has over the past 30 years. Seven other NEA subsidiaries are currently constructing projects to add another 474MW to the national grid. But even more important than NEA subsidiaries have been local IPPs: Nepali companies which have over the past three decades enthusiastically entered the hydropower sector. From a regulatory perspective, the credit for mobilising domestic private investment to engage in power generation goes to Minister of Water Resources Shailaja Acharya, who in 1998 offered a flat feed-in-tariff of Rs4/kWh for hydropower projects under 10MW. This upfront offer removed a major barrier that early developers had faced of having to spend money to carry out a detailed feasibility study before they could even start tariff negotiations with NEA. She had laid the foundation stone of the Chilime project, and proved to be the champion of opening up the sector for domestic IPPs. The guarantee of a PPA with a fixed tariff, irrespective of project specifications, gave small power developers the confidence to apply for survey licenses and invest in feasibility studies so they could directly approach commercial banks and make a case for their project producing required revenue to repay loans. Domestic IPPs started adding power to the national grid in 2002. Their contribution was initially modest, and first projects were small and commercial lenders who took time to be confident about providing debt financing to a sector which had previously not been considered suitable for private sector investment. While the first 10 years were slow, with less than 10MW being added to the grid each year, this increased twenty fold over the following ten years, resulting in the equivalent of a Baby Arun being added by Nepali IPPs to the grid each year. A total of 84 IPPs added 232MW, 328 MW, 454MW, and 400MW of new generation to the grid in 2021-2024 (graph). There was explosive, exponential growth as domestic developers have surged ahead to account for 76% of the new megawatts added to the grid since 2020, compared to 24% by NEA and its subsidiary companies. The megawatts that IPPs are adding have followed the classic ‘hockey stick curve’ with the ‘breakout point’, signaling the rapid growth phase in 2020. Private producers are expected to accelerate new generation in the coming years with 300 solar and hydropower projects adding 11,000MW. Another 166 hydropower and 96 solar projects are currently in the survey stage, and are in line to add another 11,000MW to the construction pipeline. One major challenge is finding financing required for the projects. Domestic investment will no longer be sufficient to finance this ambitious pipeline of renewable energy projects. Project developers as well as NEA and the Electricity Regulatory Commission will have to leverage their substantial experience accumulated through the construction of over 200 projects to attract regional and international investment and hedge the risks of dollar-denominated PPAs. Following the cancellation of Baby Arun, <a href="https://nepalitimes.com/opinion/people-power/decentralising-power-in-nepal">Nepal developed a highly distributed power sector</a>. The national electricity grid is currently supplied with power from a remarkably decentralised array of hundreds of hydropower and solar photovoltaic projects spread across 43 districts and all seven provinces.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829150848_0c3aa66b34bfb08380a624f397bf3ebb4126f4d6b41a26115848b496876f501b.jpg" data-media-id="editor_6" data-image-id="20250829150848_0c3aa66b34bfb08380a624f397bf3ebb4126f4d6b41a26115848b496876f501b" data-rendition-name="original" width="1228" height="867" loading="lazy" alt="30 years after Baby Arun"> </figure>  This presents a sharp contrast to the pathway of a few large public sector hydropower projects with a sprinkling of private sector projects that was envisioned as part of NEA’s investment planning when Baby Arun was being considered the front runner for investment. The strategy then was to allow public sector investment in a few large hydropower projects with thermal plants to fill the gap. Knowing what we know now about acceleration of climate change impacts and increased extreme weather events, following this path would have made Nepal’s power sector highly vulnerable. Decentralised generation greatly improves the resilience of Nepal’s power supply as damage to power plants in one part of the country need not affect other areas that have their own generation. Following the investment plan where over two thirds of the country’s power supply would have come from power plants on the Arun River, would have greatly imperiled Nepal’s energy security. All rivers in Nepal are susceptible to flooding from cloudbursts made more frequent by climate change. The Arun River which is fed by glaciers in Tibet is also at risk to glacial lake outburst floods. Bikash Pandey is Director of Clean Energy and Circular Economy at Winrock International. People Power is his regular column in Nepali Times on global energy issues relevant to Nepal. <h2>Decentralised and Diversified</h2> In the 30 years since the cancellation of ‘Baby Arun’: Hydropower projects constructed cover capacities ranging from less than 1MW to 456MW and developed by IPPs from across the country with strong local involvement in purchasing equity shares. Renewable energy sources contributed to the generation mix through solar IPPs that further contribute to climate resilience, and cover shortfalls during low rainfall. The government is committed to solar contributing 10% of the power on the grid. Increasing solar beyond this target and providing incentives to project developers to invest in utility-scale battery storage would further improve resilience. BIG ARUN: The 900MW Arun III project under construction since 2018 at Num in Sankhuwasabha (pictured, below) is a separate initiative by a different project developer using a different financing modality. The ‘Baby Arun’ version of Arun III was cancelled in 1995.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829150852_df534df5166eb5a9bb4cbe101627bdec7ac1df2a405a9d3988d1c86fcc8ecdeb.jpg" data-media-id="editor_7" data-image-id="20250829150852_df534df5166eb5a9bb4cbe101627bdec7ac1df2a405a9d3988d1c86fcc8ecdeb" data-rendition-name="original" width="1750" height="1312" loading="lazy" alt="30 Years after Baby Arun"> </figure>

30 years after Baby Arun

Turkish Airlines is official airline partner for the second edition of the Vatsalya Everest Women’s Volleyball League (EWV). The league, scheduled for 5-13 September, will take place in Pokhara and feature 18 international players alongside elite Nepali volleyball talent. The agreement was signed by Turkish General Manager Serkan Başar, and EWV CEO Snevy Chapagain. “Turkish Airlines’ support ensures a seamless journey and adds immense prestige to the league’s goal of women’s empowerment through sports as well as the agenda of sports tourism,” said Chapagain. “We are thrilled to partner with Vatsalya Everest Women’s Volleyball League as the official airline. With this association, we aim to support women role models in sports. We believe this association will connect countries to Nepali volleyball,” remarked Basar.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250825030844_36df66612152abbea71f15579358a2bb0fe797f21cbe7e7c7f28e3fe91655ae4.jpg" data-media-id="editor_0" data-image-id="20250825030844_36df66612152abbea71f15579358a2bb0fe797f21cbe7e7c7f28e3fe91655ae4" data-rendition-name="original" width="1920" height="1280" loading="lazy" alt="Turkish"> </figure>

Turkish to sponsor women’s volleyball league

India and China have a long-standing border dispute along their Himalayan border which has erupted in violent skirmishes. But Indian and Chinese officials last week agreed to ignore Nepal’s own border dispute with India to facilitate trade. The Indian Ministry of External Affairs this week flatly rubbished <a href="https://nepalitimes.com/editorial/territorialism">Nepal’s territorial claims</a> to the Lipulek Pass and the Kalapani Region, including Limpiyadhura, which Nepal considers as the source of the Mahakali River that forms Nepal’s western border with India. The latest episode in this dispute has come as Sino-Indian relations have thawed after US President Donald Trump slapped <a href="https://nepalitimes.com/news/nepal-and-the-us-india-tariff-tiff">sanctions on Indian exports</a>. The joint communiqué in Beijing said India and China had agreed to resume their border trade through the Nathu La, Sipki La and Lipulek during Chinese foreign minister Wang Yi’s visit to New Delhi. Lipulek is a pass 10 km north-east of <a href="https://nepalitimes.com/news/there-is-precedent-to-settling-kalapani">Kalapani</a> which has been disputed ever since the Survey of India published its 1879 map, where the source of the Mahakali was suddenly shifted from Limpiyadhura to Lipulek.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250826060824_4e68dd5964e0995b91148de9978a1de52b19691e1b01f52a405924fd130c22bd.jpg" data-media-id="editor_3" data-image-id="20250826060824_4e68dd5964e0995b91148de9978a1de52b19691e1b01f52a405924fd130c22bd" data-rendition-name="original" width="2000" height="2083" loading="lazy" alt="Lipulek dispute explainer"> </figure>  This tributary of the Mahakali was called the Kali on this map, and is a fordable tributary and not the main channel of the border river. The main Kali River was renamed Kuti Yangdi, and this happened while the British were still in India presumably to gain access to the Lipulek in contravention of the 1816 <a href="https://nepalitimes.com/banner/borderline-disorder">Sugauli Treaty</a>.&nbsp; This subterfuge continued even after India gained independence in 1947. Nepal has maintained that the main channel of the Kali is the border as per the 1816 treaty, when Nepal lost a third of its territory to British India. It is all well and good that India and China are now friendly enough to <a href="https://archive.nepalitimes.com/news.php?id=19447">open border trade</a> routes, but it should not be in violation of Nepal’s territorial integrity. Nepal should be called for diplomatic and political negotiations regarding the Lipulek pass and the Kalapani region comprising Limpiyadhura.&nbsp; Read also: <a href="https://nepalitimes.com/opinion/comment/when-xi-meets-modi-and-oli">When Xi meets Modi and Oli</a>, Kanak Mani Dixit China and India, but especially the latter, should invite Nepal to discuss these issues and iron out the disputes based on facts and evidence and maps. Nepal had sent seven diplomatic notes to India and three to China so far regarding the Lipulek and Kalapani. India has not responded to any of them. China replied once saying that Nepal and India should sort out their border disputes first before voicing their opinions. Nepal welcomes the recent talks between India and China that it hopes will positively impact on settling border disputes that are mostly stalled since the 1962 Sino-Indian war, the 73-day military standoff over the disputed Doklam region between China and Bhutan, and the 2020 Galwan clash in Ladakh. Nepal’s two large neighbours seem to have come to their senses and realised that it is in their interest to collaborate rather than confront each other when President <a href="https://nepalitimes.com/opinion/trump-s-first-month">Trump is acting erratically</a> with threats of sanctions and tariffs.&nbsp; Prime Minister K P Oli should bring up Nepal’s grave concerns about the Lipulek during his state visit to India next month when he will meet Prime Minister Narendra Modi in Bodh Gaya. The two are also expected to meet next week at the Shanghai Cooperation Organisation summit in Tianjin when Chinese President Xi Jinping will also be present. But even before that Nepal should send diplomatic notes to both the Indian and the Chinese governments regarding their agreement to resume border trade through the Lipulek.&nbsp; Here is a timeline of the developments regarding the Lipulek: Sino-Indian Agreement of 1954 This 8-year Agreement on Trade and Exchange between Tibet and India was signed in Peking on 29 April, 1954 by the Chinese Vice-Foreign Minister Chang Han Fu and the Indian Ambassador Nedyam Raghavan.&nbsp; There was no explicit mention on the border settlements either on the Line of Actual Control (LAC) or on Ladakh, although trade and pilgrimage through Lipulek and other 5 passes (Sipki La, Mana Pass, Niti Pass, Kungri Bingri Pass and Dharma Pass) were agreed upon.&nbsp; Trade between Uttar Pradesh state and the Tibet Autonomous Region was through ‘border &nbsp;point of the agreement states: ‘With a view to facilitating the visits of persons engaged in border trade and the exchange of commodities and means of transportation, (India and China) have decided that Lipulek (Qiangla) be the border pass for the entrance and exit of the said persons, commodities and means of transportation from the two sides.’ The agreement expired on 6 June 1962 during the Sino-Indian war, and the two sides did not renew it. Bilateral ties started to normalise only in the 1990s with the Indian decision in 1988 to abandon its policy of settling ‘territorial issue’ for ‘normalisation of relations’. India There was no reaction from Nepal to the 1954 agreement since Nepal did not have diplomatic relations with China yet at the time. Sino-Indian Agreement of 2005 The Political Parameters and the Guiding Principles for the Settlement of the Sino-Indian Boundary Question is detailed in 11 Articles, which outline the steps to be taken for a Peaceful and Tranquil Border. The agreement was a direct outcome of the Special Representatives mechanism that had been set up through a 2003 agreement. It also incorporated the Confidence Building Measures in Military Field along the Line of Actual Control (LAC) in the Sino-Indian Border Areas signed in 1996.&nbsp; A protocol on Modalities for the Implementation of Confidence Building Measures in the Military Field along the Line of Actual Control in the India-China Border Areas signed during Chinese Premier Wen Jiabao’s India visit, which stated in Clause 2 of Article 5: ‘Both sides agree to extend in principle to expand the mechanism of border meeting points to include Kibithu Dhamal in the Eastern Sector and Lipulek Pass (Qing La) in the Middle Sector. The precise locations of these border meeting points will be decided upon mutual consultations.’ Nepal’s Foreign Ministry issued a statement in 2005 stating that Nepal had asked China about the issue and the Chinese Embassy clarified that the agreement had nothing to do with Kalapani. This was perhaps the first time that Nepal had objected to the Sino-Indian agreement on Lipulek. King Gyanendra had staged a coup d’état on 1 February 2005, just two months prior to this agreement. The Nepali press voiced criticism of China in particular for disregarding the country’s sentiment.&nbsp; Sino-Indian Agreement of 2015 India and China signed several documents during the state visit of Chinese President XI Jinping to India on 18 September 2011. Number one on the list was: ’Opening a New Route for Indian Pilgrimage (Kailash Mansarovar Yatra) to the Tibet Autonomous Region of the People’s Republic of China’.&nbsp; The Indian foreign ministry stated: ‘The MoU provides for conducting the annual Kailash Mansarovar Yatra through Nathula Pass in Sikkim in addition to the existing Lipulek Pass in Uttarakhand’. On May 15, 2015, China and India issued a Joint Statement during Indian Prime Minister Narendra Modi’s visit to China. Point 28 under the ‘Trans-border Cooperation’, states that the two sides agreed to ‘hold negotiation on augmenting the list of trades commodities, and expand border trade at Nathu La, Quingla/Lipulek Pass and Sipki La Pass’. Nepal’s objection to the 2015 agreement was stronger than in 2005. Prime Minister Sushil Koirala called up Narendra Modi to express Nepal’s displeasure It was not until 2020 that Nepal’s Foreign Minister disclosed that ‘Nepal had expressed its disagreement in 2015 through separate diplomatic notes addressed to the governments of both India and China … including Lipulek Pass as a bilateral trade route without Nepal’s consent.’  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250826060824_d4497e2620bba81211d27e427393974877e09006abc26e13055508996e5b29ea.jpg" data-media-id="editor_8" data-image-id="20250826060824_d4497e2620bba81211d27e427393974877e09006abc26e13055508996e5b29ea" data-rendition-name="original" width="1108" height="1550" loading="lazy" alt="Lipulek dispute explainer"> </figure>  The new political map of India published by the Survey of India in November 2019 that incorporated areas east of the Kali River including Kalapani as Indian territory sparked renewed public, and political, attention to the Mahakali dispute. The Nepal government then countered by formally approving the publication of the new Political and Administrative Map of Nepal including all territories lying to the east of the Mahakali River on May 18, 2020. In June, the House of Representatives unanimously endorsed the second amendment to the Constitution of Nepal to update the country’s new political map in the national emblem. Sino-Indian Consensus of 2024 A 6-point Consensus on Peace and Tranquility on the Line of Actual Control (LAC) was agreed on December 18, 2024 between the Special Representative of the People’s Republic of China, Wang Yi, and the Special Representative of the Republic of India, Ajit Doval.&nbsp; India has not denied that this is a consensus, while China made it clear that this was not a Joint Statement. This Consensus is in line with the 2005 agreement, and was agreed during the 23rd round of the Special Representatives talks held after a gap of five years aimed at restoring bilateral ties frozen because of the military standoff in Ladakh. The agreement included: cross-border communication and cooperation, promoting the resumption of pilgrimages by Indians to Xizang, cooperation on crossborder rivers, and trade at the Nathu La Pass. Nepal made no reaction to the statement despite Lipulek being the pilgrimage route for Mansarovar and Kailash.&nbsp; Prabhakar Sharma is a construction engineer and an international border expert who has worked as a survey engineer for the Cameroon-Nigeria border demarcation by the United Nations.