Kathmandu: In a significant diplomatic development, Indian Foreign Secretary Vikram Misri met with Nepal’s Prime Minister Balen Shah in Kathmandu. The high-level meeting is being viewed as a crucial step in mending and advancing bilateral relations, especially after Shah had previously postponed their scheduled interaction.
The discussions during this pivotal meeting encompassed a wide array of strategic and economic subjects, including a proposed $2 billion aid package, ongoing border disputes, energy cooperation, and bilateral trade. This engagement marks an important prelude to Shah’s anticipated bilateral foreign visit, his first since assuming office in March.
The backdrop to this meeting has been diplomatically complex. An earlier visit by Misri, proposed for May, was abruptly cancelled without official explanation. Local media reports, including those from The Kathmandu Post, had suggested that the cancellation was linked to Shah’s policy against holding one-on-one meetings with foreign officials ranked below a foreign minister. This rigid stance was evident earlier this year when Shah declined to meet with US officials Paul Kapur and Sergio Gor. However, diplomatic channels remained open, eventually leading to Shah meeting Indian Ambassador Naveen Srivastava in July, marking a shift from his previous approach.
The bilateral relationship received a notable boost following the devastating floods in August. India stepped up its support, supplying 140 tonnes of relief materials between August 26 and September 19, according to the Ministry of External Affairs. This aid included vital equipment for restoring connectivity, deployment of rescue teams, and tunnelling experts. Acknowledging this prompt assistance, PM Shah praised India during his address at the United Nations General Assembly in September, where he also proposed a Himalayan Climate Resilience Mechanism involving Nepal, India, and China.
A major focal point of the recent talks was a substantial economic package. Reports indicate Nepal has requested an Indian assistance package exceeding $2 billion (approximately Rs 18,786 crore) through grants and lines of credit. An official from Nepal’s Finance Ministry hinted that a formal announcement regarding this package—intended for post-flood reconstruction and transmission line projects—might coincide with Shah’s prospective visit to India.
The dialogue also touched upon sensitive bilateral issues, notably the Kalapani-Lipulekh territorial dispute and the suspension of Gorkha recruitment in the Indian Army following the introduction of the Agnipath scheme in 2022. Kathmandu has argued that the Agnipath scheme violates the 1947 Tripartite Agreement between India, Nepal, and the UK. As diplomatic engagements intensify, these discussions pave the way for addressing existing differences while bolstering economic cooperation between the two neighbouring nations.