Kathmandu: Nepal-India relationship should not deteriorate over the current border row as the landlocked country is dependent on its southern neighbour for the essential items and it would be unwise to consider China as an “alternative”, a leading Nepali economist said on Monday.
Commenting on Nepal’s move to amend the Constitution for incorporating India’s territory of Lipulekh, Kalapani and Limpiyadhura, Dr Posh Raj Pandey, the executive chairman of the South Asia Watch on Trade Economics and Environment (SAWTEE), a consortium of South Asian NGOs, said that its economic impact will depend upon how India reacts.
Nepal is not only a landlocked country, but also India locked as it is surrounded by India from the three sides. The situation will be vulnerable. If India retaliates, it will have a huge economic impact on the country, said Pandey, who has been working on issues of international trade and economic development for over 20 years.
His remarks came as Nepal’s ruling and Opposition political parties on Saturday voted in unison to amend the Constitution to update the national emblem by incorporating the controversial map incorporating Lipulekh, Kalapani and Limpiyadhura in India’s Uttarakhand.
India has described Nepal’s move as “untenable.”
Pandey said that the Nepal-India relations should not be allowed to damage and there is a need for early negotiations and a dialogue to resolve the issue at the earliest .
Nepal is dependent on India for the supply of essential goods, said the economist, who was one of the negotiators for Nepal’s accession negotiation for the World Trade Organisation membership.
Our imports from India account for two-third whereas that from China is just 14 per cent, Pandey, a former member of the National Planning Commission, said, adding that China cannot be an alternative to India as far as the supply of essentials are concerned.
We have trading points from Mechi in the east to Mahakali in the west with India, but with the northern neighbour, we only have a few transit points and that also lack infrastructure, he said.
Pandey said that Nepal’s nearest access to sea from the north is 4,000 kms, which is three times more than the one it is having from the Indian side in Kolkata.
So, our third country trade is being conducted mainly through the southern route, he said.
As far as our exports are concerned, India receives 60 per cent of our total exports whereas China receives only two per cent.
In remittances, we receive around 15 per cent of the total remittances from India and if we compare it with the Gross Domestic Product (GDP), it comes around 4-5 per cent, Pandey said. However, Nepal is also one of the largest sources of remittances for India, he said.
According to a 2016 World Bank report, Nepal is on the tenth position in the list of countries sending remittances to India, which is on par with the US and Canada, he said. (PTI)
