On his first foreign visit after coming to power, Nepal’s Prime Minister Kharga Prasad Oli focused on working to strengthen bilateral ties while simultaneously eliminating China from discussions, thereby diluting apprehensions about there being any “confusion” between the two neighbouring countries. In their joint statement, Prime Minister Narendra Modi and PM Oli underlined the, “need for expeditious implementation of bilateral projects in Nepal and to reinvigorate the existing bilateral mechanisms to promote cooperative agenda across diverse spheres.” Addressing the media, Vijay Gokhale, Foreign Secretary, while answering a query about “One Belt, One Road”, said, “China was not discussed in any of the bilateral talks between the two Prime Ministers. Nor did OBOR come up in their discussions.”

The revelation came at a time when India and Nepal were under speculation to change the colour of their relationship under the new leadership of PM Oli, who after the 2016 blockade had been vocal about his discontent with Indian government’s policy towards Nepal. Prioritising other issues, the Nepal leadership kept China a non-factor, focused on trade deficit, agriculture and connectivity that PM Oli said were of key importance for development of Nepal. Another popular subject that did not figure in the bilateral talks was demonetisation. Since there were reports of demonetised Indian currency still being in circulation in Nepal, it was expected that the Indian leadership will bring up the issue in the bilateral. While PM Oli’s increasing proximity to China has been a concern for India, in a strategic move to build confidence between the leadership of the two countries, India focused on Nepal’s discontent over pending projects and boosting connectivity for the land-locked nation.

The two Prime Ministers virtually inaugurated the Integrated Check Post at Birgunj in Nepal and Motihari-Amlekhgunj cross-border petroleum products pipeline at Motihari. India announced new partnerships to develop the inland waterways for movement of cargo and in the agriculture sector. India and Nepal also agreed to construct a new electrified rail line, with India’s financial support, connecting the border city of Raxaul in India to Kathmandu in Nepal. The rail line is seen as a counter to China’s proposal to extend Qinghai-Tibet railway beyond Shigatse and Kyirong to the Nepal border by 2020— Kyirong is only 25 km from Nepal’s Rasuwagadhi border, 50 km from Kathmandu.

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