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Rajiv Gandhi Natinal University of LAW: Economic Analysis of Economic Blockade in 2015 On Nepal

This document discusses the economic blockade of Nepal by India in 2015. It lasted for 135 days and severely impacted Nepal's economy as India is Nepal's largest trade partner and sole supplier of petroleum. The blockade cut off imports of fuel, pharmaceuticals, and earthquake relief materials. It was imposed after Nepal adopted a new constitution that did not fully address the demands of the Madhesi population near the India-Nepal border. The blockade caused major humanitarian and economic hardships in Nepal and increased anti-India sentiment among the Nepalese public.

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0% found this document useful (0 votes)
95 views20 pages

Rajiv Gandhi Natinal University of LAW: Economic Analysis of Economic Blockade in 2015 On Nepal

This document discusses the economic blockade of Nepal by India in 2015. It lasted for 135 days and severely impacted Nepal's economy as India is Nepal's largest trade partner and sole supplier of petroleum. The blockade cut off imports of fuel, pharmaceuticals, and earthquake relief materials. It was imposed after Nepal adopted a new constitution that did not fully address the demands of the Madhesi population near the India-Nepal border. The blockade caused major humanitarian and economic hardships in Nepal and increased anti-India sentiment among the Nepalese public.

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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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RAJIV GANDHI NATINAL UNIVERSITY OF

LAW

ECONOMIC ANALYSIS OF ECONOMIC


BLOCKADE IN 2015 ON NEPAL

SUBMITTED BY: SUBMITTED TO:


AVIK AGGARWAL Dr. MAYANK GOEL
ROLL NO. 19071 (ASSITANT PROFESSOR
GROUP NO. 04 OF ECONOMICS)
ACKNOWLEDGEMENT

On completion of this project it is my present privilege to acknowledge my


heartfelt gratitude and indebtedness towards my teachers for their valuable
suggestion and constructive criticism. Their precious guidance and
unrelenting support kept me on the right path throughout the whole project
and very much thankful to my teacher in-charge and project coordinators for
giving me this relevant and knowledgeable topic.

I wish to express my sincere gratitude to my teacher Assistant Professor Dr.


Mayank Goel for her guidance and encouragement in carrying out this project
work.

I also wish to express my thanks to my group members and my friends for their
ideas because of which this project became more captivating. I am also
thankful to my institution library for providing a broad range of books to learn
more.

2|Page
RAJIV GANDHI NATIONAL UNIVERSITY OF
LAW, PUNJAB

SUPERVISOR’S CERTIFICATE

Dr. Mayank Goel Date: 04/04/20

(Assistant Professor of Economics)

This is to certify that the project titled ECONOMIC ANALYSIS OF


ECONOMIC BLOCKADE IN 2015 ON NEPAL submitted to Rajiv Gandhi
National University of Law, Patiala in partial fulfilment of the requirement of
the B.A.LLB (Hons.). Course is an original and bona-fide research work carried
out by Mr. Arunjeet Singh under my supervision and guidance. No part of this
project has been submitted to any University for the award of any Degree or
Diploma, whatsoever.
CONTENTS
1. INTRODUCTION..............................................................5

2. ECONOMIC BLOCKADE OF 2015.................................7

3. ANALYSIS OF SOCIO ECONOMIC ASPECTS…........9

4. STATISTICAL ANALYSIS….........................................12

5. CONCLUSION..................................................................16

6. BIBLIOGRAPHY............................................................18
1. INTRODUCTION

The Republic of India and the Federal Democratic Republic of Nepal initiated their relationship
with the 1950 Indo-Nepal Treaty of Peace and Friendship. Nepal is the world’s 45th-biggest
country in the world, with a population of 29 million people. . The country takes pride in its
history of never having been colonised and has an important geostrategic position, with India and
China on either side. However, contrary to conventional notions of a harmonious diplomatic
relationship, there is a sharp difference in the way Nepal and India view each other. The treaty of
1950 also granted the people of Nepal, with the same opportunities in terms of education and
business operations as citizens of India in our country , while offering preferential treatment to
Indian citizens and businesses over other nationalities in Nepal. The border of Nepal with india
is open and porous; Nepalese and Indian nationals may move freely across the border without
passports or visas and may live and work in either country. However, there are some restrictions
like Indians aren't allowed to purchase and become owner of land-properties or work in statet
institutions in Nepal, while Nepalese nationals in India are allowed to work in Indian government
institutions (except in some services like some civil services1.
Since independence, India has followed Britain’s approach in having a treaty-based relationship
with Nepal, which led to Nepal’s resentful acceptance of Indian dominance. Nepal’s ruling elite
were of the view that India did not treat Nepal as per the spirit of a “special relationship.” It is
believed that india kept Ignoring reservations, India managed to keep the Himalayan nation in its
fold for several decades. The Indian establishment saw this as a success of its policies that
yielded a stable relationship with its “little brother.” Nepal’s eagerness to engage with China has
been of interest to observers and largely misinterpreted as Prime Minister Khadga Prasad Sharma
Oli’s strategy to acquire more from India. However, the current approach fits perfectly in Nepal’s
long tradition of pursuing a diversified foreign policy and partners, taking advantage of its key
geostrategic position. Nepal government aims to keep Nepal’s relationship with China
independent of the one it shares with India.2
Despite similar linguistic, rituals, religious, and, cultural ties, at people to people level between
Indians and Nepalese, since late 2015, political issues and border disputes have strained ties
between the two nations with sentiments against india growing amongst the government and
public of Nepal.
“A pleasant equilibrium is never easy between a big power and a smaller power in geopolitics,
and between a monopolist and a monopsonist in the arena of investment and trade. Such is the

1
Rakesh Sood (23 July 2014). "A new beginning with Nepal". The Hindu
2
https://www.orfonline.org/wp-content/uploads/2018/10/ORF_IssueBrief_260_India-Nepal_FinalForUpload.pdf
geopsychology of relations of nepal with India whose presence in Nepal is dominant, and
coupled by India's lop-sidedness and Nepal's landlockedness. Due tolack of an alternative route
to markets and the high seas one may even say, metaphorically, it is 'India locked'. But this is c
changing considerably, as the China builds rail and roads along the Nepalese borders. Shortly,
new land routes will be opened up, and there is talk of a Beijing- Lhasa railway line being
extended to the border of Nepal. Moreover, China is making efforts to explore opportunities in
trade,finance, investment and tourism in Nepal; it could soon reach up and even surpass India's
share in many sectors in Nepal within the upcoming decade or even earlier.3”
Before 1951 AD, Nepal's foreign trade was only with India and Tibet. But after 1951 AD,
Nepal's trade relation expanded with many other countries of the world like Japan, the USA,
Germany, Malaysia, Singapore, Thailand, Kuwait, France, Bangladesh, Spain, etc. India is
Nepal’s largest export market, the biggest source of its imports and the top investor of foreign
capital stock. India also provides Nepal transit facility through its territory to access sea ports for
trading with rest of the world.
India accounts for over 65% of Nepal’s merchandise trade, about 30 of trade in services, 35% of
foreign direct investments, almost 100% of petroleum supplies, and a major share of inward
remittances on account of working professionals, pensioners and workers working in India.4

3
https://activityinsight.pace.edu/jlee/intellcont/2013- Not%20Too%20Peaceful%20Maritime%20Rifts
4
%20and%20Governance%20Crises%20in%20China-1.pdf
https://www.indembkathmandu.gov.in/page/about-trade-and-commerce/
2. ECONOMIC BLOCKADE OF 2015

A blockade is an effort to cut off supplies, war material or communications from a particular area
by force, either in part or totally. A blockade should not be confused with an embargo or
sanctions, which are legal barriers to trade.
The 2015 Nepal blockade, which began on 23 September 2015 and lasted for 135 days, was an
economic and humanitarian crisis which severely affected Nepal and its economy.Nepal had
accused India of imposing an undeclared blockade. As a landlocked nation, Nepal imports all of
its petroleum supplies from India. Roughly 300 fuel trucks enter from India on a normal day, but
this has dwindled to a sporadic passage of 5–10 fuel trucks daily since the start of the crisis,
though consignments of perishable commodities like fruits and vegetables were generally
allowed to pass.
Indo-Nepal border was blocked for more than two months, and is being referred to as another
“disaster” following the earthquake in April 2015, which killed more than 10,000 people and
destroyed lakhs of houses. The blockade hindered the imports of not only petroleum products,
but also pharmaceuticals and earthquake relief material. Prior to blockade, two major parties of
Nepal – the Nepali Congress party and the Communist Party of Nepal used to be Pro- India in
their approach. New Delhi has long enjoyed considerable influence in Nepal, not just because of
the latter’s economic dependence, but more importantly because of the political influence which
New Delhi had exercised over the last few decades. It was said until recently that Nepal doesn’t
take any major political decision without the approval of India .
“This Economic Blockade was an extreme brutal practice which India will be repentant about
one day sooner or later. The fundamental rights of Indian as well Nepali people were violated
and the interesting thing is that no Action has not been taken till date by the international
authorities to serve justice to nepal. This kind of practice by India time and again questions the
existence of India as a good neighbor. This event caused rise of resentment and hatred among the
Nepalese and made them think that Nepal is India locked instead of Landlocked.
There was a 135 days long blockade along the Indo-Nepal border that began immediately after
the adoption of a new Constitution by Nepal on September 20, 2015. The blockade was along
Nepal’s southern border with India, covering the Terai region. The flow of goods and fuel to
Nepal was choked at border check points. This resulted in one of the worst humanitarian and geo-
political crisis in the sub continent region as petroleum, pharmaceuticals and other indispensable
items of daily life could not reach Nepal from India
The Blockade was caused because of the demands of Madheshis, supported by India, are directly
opposite to the intrests of two other groups ethnic groups – the Tharu and the Kiranti agitating
for full autonomy from Kathmandu causing instability in the border region . On 20 Sept. 2015,
the Constitution of Nepal was passed with complete majority of representatives in Nepal's
Constituent Assembly (CA). On the day that the fuel blockade began, India put forwarded its
demand related to specific changes to the new Nepali constitution to suit its intrest. These
changes were communicated by New Delhi to Kathmandu5. Personnel from the SSB ( Sashtra
Seema Bal) "confirmed that at least till the end of September, they had orders from above to
interrupt fuel shipments to Nepal. Nepali social media protested against the alleged Indian
interference with the slogan #BackOffIndia.”6.

PREVIOUS BLOCKADES
“The first instance of obstruction occurred during 1969 after the termination of the 1950 Trade
and Transit Treaty; where the govt. of india imposed restrictions in terms of quantity on cross
border transactions. The extent, to which Nepal’s economy was affected, is however misty
because of lack of quantitative figures during the time-period to analyze the impact of the
situation. This blockade was for a very short time period, it created a problem in smooth
supply of some commodities like spices and some other agricultural products as Nepal was
dependent for these products on India the impact on the economy was not as pronounced as the
current situation given the brief duration of the blockade7.
8
The 1989 Blockade: On the pretext of buying a batch of Chinese Weapons , The Indian
blockade which started from from the beginning of the month of April 1989 lasted for about 15
months had created shortages of indispensable commodities like food products, , oil, spices, salt,
including the supply of petroleum products. The blockade of 1989 also emerged following the
lapse of the trade and transit treaties, which by this point had been bifurcated into 2 different
treaties i.e. Treaty of Trade and Treaty of Transit. In the year 1989, India had closed 19 of the 21
border crossings, after a dispute over renegotiation of lapsed trade and transit treaties between the
two countries arose”.
Scenario of 2015
Indian officials via press release declared that amid protests related to new constitution of
Nepal all the border crossings in Nepal witnessed unusual stoppage of goods and hindrance of
transportation activities from India to Nepal. The blockade is resulting in isolation of the

5
"Make seven changes to your Constitution: India tells Nepal". Indian Express. 24 September 2015.
6
"Nepalese thorn will only get worse for India". Business Standard. 20 October 2015.
7
file:///C:/Users/avik/Downloads/21270-Article%20Text-67006-1-10-20181005.pdf
8
Barbara Crossette (11 April 1989). "Nepal's Economy Is Gasping as India, a Huge Neighbor, Squeezes It Hard".
The New York Times.
landlocked nation from the outside world at a time when the country is still coping up with
ongoing landslides blocking border trade with China following the devastating earthquake in the
month of april. Meanwhile, none of the $4 billion of international donation for the earthquake
relief related activities to the Nepali government have been reach the survivors even after many
months, becoming a cause of anger and resentment among Nepalese and international
community.9
The government of nepal “decided to stop providing fuel to private owned vehicles including
public transport and taxis for few days at the herald of the blockade so as to distribute the fuel to
government and prioritized sector. Around 2,000 factories are shut down as of 1 October
2005.10The Nepal Oil Corporation alleged and at the same time filed a suit against the Indian Oil
Corporation for the hindrance in fuel supply to Nepal. Nepal government started selling
firewood in Kathmandu as a substitute to the cooking gas because there were acute shortage of
LPG. On 28 October, the Nepal Oil Corporation and PetroChina signed an agreement to import
fuel from China, the first fuel agreement ever between the two nations. China also pledged to
donate 1,300,000 liters of fuel to Nepal. Now it is being planned by nepal to import 35% of its
fuel from China11”

3. ANALYSIS OF SOCIO ECONOMIC ASPECTS

There was a long blockade on the Indo-Nepal border that began instantly when this tiny land
locked Asian country adopted a replacement Constitution on Sept twenty, 2015 and extended
over a period of four months. The flow of products and fuel to Nepal was clogged at the border
check points. This resulted in one of the worst humanitarian and geo-political crisis within the
region as fuel, pharmaceutical items and alternative essential things of everyday life couldn't
reach there. It's seriously exaggerated the hatred in the mid of Nepalese . Those who suffered the
most grievous damage were the weakest and poorest sections of Nepali society.
“Education: The continuous blockade by India has directly hit the entire academic sector,
compelling shutdown of schools. The fuel crisis has affected millions of students, including
around one million school students in the Valley alone . Around 2000 private schools operate in
the Kathmandu Valley, about 80 per cent have been closed as they faced difficulty to carry

9
Omar Havana via Getty Images (3 September 2015). "Nepal Hasn't Spent Any Of The $4 Billion In Donations
Since Earthquake". The Huffington Post. Retrieved 1 October 2015.
10
"The Kathmandu Post :: 2,000 factories remain shut due to Tarai unrest". ekantipur.com. Retrieved 1
October 2015.
11
Krishnan, Ananth (29 October 2015). "China says will support Nepal 'sovereignty' after landmark fuel deal". India
Today. Retrieved 2 November 2015.
students and teachers to and fro from schools. According to estimations of UNICEF more than 16
lakh children in the central and eastern plains alone were deprived of schooling following the
situationof unrest in the Terai region of nepal as schools in Terai have been forced to remain shut
for the last 75 days12.”
Health: Health sector is another major sectorto be badly hit by the undeclared blockade.
Hospitals are gradually being unable to provide health care services due to the scarcity of
oxygen, pharmaceuticals , medical equipments and blood supply. It became impossible for the
hospital authorities to run hospitals without those essential supplies. Hospitals also highlighted
theinability of the dispensaries to supply lifesaving medicines in future to come if the present
economic blockade continues further. Major public hospitals in the Kathmandu Valley need 1700
litres of diesel, 200 litres of petrol, 18 cylinders of LPG and 245 cylinders of oxygen every day to
run their services uninterrupted.
Transportation: The blockade has disrupted the transportation sector of the country at the peak
of Nepal’s national holiday season, preventing lakhs and lakhs of people from travelling to
ancestral homes. There were incident of accidental deaths caused by dangerously overcrowded
public transport, with passengers including women, children and the elderly forced to travel
precariously on rooftops of buses posing great threat to themselves and others on the road. On the
other hand, according to the National Federation of Transport Entrepreneurs, the transport sector
is facing a loss of 20 to 25 cr. rupees a day.
Energy: “Nepal needs 1200 megawatt electricity to meet its energy requirements. But, domestic
production of electricity by the way of generation of hydroelectricity in Nepal is only 600
megawatts and around 180 megawatts unit of energy is is imported from India. Rest of the
energy need is met by the use of diesel run generators. The scarcity of fuel created by the
blockade has badly affected the operation of generators causing severe energy crisis. Similarly,
the crisis of LPG has caused huge difficulty for the Kathmandu Valley consumers to prepare
their meals. Most of the hotels and restaurants have been forced to shut. Country’s monthly LPG
demand stands at thirty two thousand tones, which rises by around 30-40 per cent during winter.
However, the supply of LPG to Nepal was sharply cut by the Indian oil corporation since the
unofficial trade and transit embargo. According to the Nepal Oil Corporation, more than 225 gas
bullets have been stuck on the Indian side of the border 13” . The shortage of energy brought the
lives of individuals to a standstill. The agony and pain faced by the Kathmandu will not be easily
forgotten by the Nepalese.

12
file:///C:/Users/avik/Downloads/21270-Article%20Text-67006-1-10-20181005.pdf

13
ibid 10 | P a g e
Food: Acute shortage of fuel caused by the blockade seriously impeded the planned deliveries
of relief supplies to the earthquake-affected region in the country. According to the UNHRC
report on Kathmandu crisis, “hundreds of tons of food materials meant for the earthquake victims
are stuck in warehouses”.“Not only did the earthquake-affected villages, many other villages of
the country faced food scarcity due to the limited supply of food in the country. In the areas,
where food was still available, prices of food items went exceptionally high reaching beyond
purchasing capacity of general public.”14
Agriculture: Around two-third of population in nepal is engaged in primary sector, contributing
to one third of the GDP. Due to the blockade, farmers find it difficult to ensure the supply of
improved seeds and fertilizers for which nepal depend upon imports other countries especially
India. Imported fertilizers were stuck at the border of india and nepal because of the blockade .
Moreover in most of the Terai region area which is called as the food basket of nepal, irrigation
is done by pumping water using water pump running on fuel. Farmers in the region complained
about the difficulty they faced while cultivating their lands due to the fuel scarcity adversely
affecting irrigation activities and thus leading country towards a state of food scarcity.
Economy and development: Across the whole Nepal, all trading and commercial activities
remained closed and important activities vital for the development of the nation such as
infrastructure development related activities were at hault. Tourism as an important economic
activity for a country like nepal was disturbed to a great extent during what would have been a
peak season. Employment opportunities have diminished nationally, forcing thousands of people
to consider migrating to other places like India, the Gulf and Malaysia and the west. The fiscal
policy of the govt.was affected grately that year due to the prolonged blockade imposed by
India. According to the Nepal Rastra Bank (NRB), the revenue collected by government
amounted only to Rs “77 billion in revenues as compared to Rs 90 billion in the same period
during the previous fiscal year”. The year 2015 was not a particularly good year for tourism and
its allied commercial activities. While the country was already facing the shrinking of tourist
activities as the aftermath of natural disaster that happened in the month of april., the emerging
signs of recovery in subsequent months were soon dampened by the agitation in the terai region
and following embargo.
The blockade played a great role in pushing lakhs of people below the into the vicious circle of
poverty over and above those have already been into the grief of poverty because of the natural
calamity earlier that year. “While on the one hand, the country is vulnerable to external shocks
like the unofficial blockade, on the other hand, it lacks the capability and economic vitality to

14
ibid
11 | P a g e
face multiple natural disasters beyond human control”15.
Almost each and every sector of the economy faced a harsh blow, ranging from travel and
tourism to transport to manufacturing to agriculture. The most vigorous construction industry of
nepal had already come to a hault before the blockade due to quake fears, changing norms,
monsoon issues, most reconstruction work has been put off until after the monsoon. Tourism, a
mainstay of hard currency, already showed up 40% cancellation post-quake.
Pharmaceutical industries remained closed, causing huge scarcity in supply of medicines ,
including for contagious diseases like TB, viral infections etc. which of course do not respect
India in an illegal manner, putting precious life patients in danger. The production of paddy
was already forecast to decrease by a fraction of one-fifth because of influence of multiple factors
including the weak monsoon and scarcity of inputs like fertilizers, poor quality of seeds received
as international aid after the disaster were some of the main reasons. UNICEF also issued
advisory citing that 30 lakh children at risk of disease and death in the country16.

4. STATISTICAL ANALYSIS

15
Pant, B. (2018). Socio economic impact of undeclared blockade of India on Nepal. Research Nepal Journal of
Development Studies, 1(1), 18-27. https://doi.org/10.3126/rnjds.v1i1.21270
16
https://icrier.org/pdf/Working_Paper_381.pdf

12 | P a g e
India has always had good trade relations with its neighbor Nepal sharing 1800 kms land border
acoss 5 states. Indo-Nepal trade relations hit a new low during the year 2015, paving way for a
state of utter chaos and confusion.There have been several instances in the past as well the
relations between the two nations deterioted as of course it was not the first stance .
moreover,since 1950, relations between 2 nations have had a history of conflicts despite age old
social, cultural and historical similarities , a friendly open and porous border, strong business
relations and a sound foundation of diplomatic ties in the form of the 1950 Treaty of Peace and
Friendship. Seldom , it is perplexing to figure out why the India and Nepal strained their bond
inspite of such multidimensional bonds between them.
While analyzing the data mentioned above it is clearly visible because of the blockade of 2015
the trade between the two countries was hampered , before this event the trend of trade has been
positive and India has always had trade surplus with Nepal as on now also economy of Nepal is
an agrarian economy employing 70% of the population in the primary sector.
Foreign trade between india and Nepal in 2014-15 amounted to 5199 millon US$ which came
down to 4401 million US$ in 2015-16. Before the blockade the total trade between and total
exports from india to Nepal grew at an increasing rate , in 2011-12 india’s export to Nepal grew
around 25% , in 2015-16 trade grew around 28% but if the post blockade trade pattern is
analyzed we see that in 2017-18 the quantum of trade remained stagnant and if growth if any be
considered is less than 1% in comparion to the trade between the two countries they had in 2016-
17.

This act of india not only affected Indo-Nepal trade but also had a wide ranging impact in term of
loss of diplomatic ties, devepolment of hatred and anti- india sentiments in the mind of nepali
people but also gave china an opportunity to advantage of the situation.. This report attracts the
attention of people towards the sorrows of a landlocked nation, and raises concerns about the
entitlements a country should posses under various international conventions and treaties.
If commodity wise micro analysis is done a major commodity that Nepal import from india is
petroleum . And as mentioned above the major setback that the landlock nation faced was
primarily caused by the shortage of fuel supplies.
17

Estimates put this loss due to the blockade at Nepali Rupee 200 billion. Trade of Nepal with any
country other that india and china was also hampered because of its landlockedness or we can say
helplessness. Keeping away the economic hardship faced by the Nepalese during the blockade
numerous other aspects must also be looked upon like schools were kept close due to shortage of
fuel supplies , hospitals ran out of supplies etc which has already been discussed in the former
part of the report while discussing the socio economic impact.
The most disheartening part of the situation was that the blockade was faced by the country
immediately after the disastrous earthquake of April 2015 which not only crippled the economy
but also claimed more than10000 lives. This blockade not only hampered the distribution of
relief supplies and international aid but also has left the citizens of that country with deep mental
scars and anti-India sentiments which has always looked upon India as its big brother.

17
https://www.phdcci.in/wp-content/uploads/2018/12/India-Nepal-Economic-Ties_New-Horizons-June-2018.pdf
5. CONCLUSION

Relations in terms diplomacy an trade between the two countries hit rock bottom during the year
2015, There is no doubt that India the vision of India in regards to Nepal is misty and should
have some firmness in its vision towards its neighbor . There have been allegations about India
being reactive instead of being proactive towards Nepal. However, there are many positive sides
to the relationship between the two neighbors. which should be taken into consideration. These
aspects need to be recognized so as to strengthen the bond between the two nations..
The shared history, religious beliefs, cultural heritage provides strength to the relationship
between the India and Nepal. But this is sad that these aspects are overlooked for personal
political gains of individuals which are ephemeral in nature . For a brighter Indo-Nepal
relationship, our neighbor needs to inculcate ,stability and a political vision which is far sighted .
At the same time ,we need to develop a clear, consistent, and Nepal oriented approach towards
Nepal.
In order to ensure its positive influence on Nepal what is necessary for India is to put aside the
criticism of presence of China in Nepal and its activities including the extension of its railway
network into the territory of the landlocked nation . It is apparent that these activities would
neither benefit our neighbor nor us.
During recent election in nepal entire political parties raised the issue against Indiaso was done
by the current PM K.P. Oli, which is apparent that proved fruitful. India has not taken the issue
seriously because socio economic impact on differenent sectors of the economy as discussed
above were devastated,” the earthquake had killed 10,000 people millions were injured but India
played the game through conspiracy theory”. Politicians may become oblivious but the public of
Nepal cannot forget and forgive us despite apologize for the nonchalant approach and so india
must learn to respect its neighbor and should happily accept th recent constitutional development
in Nepal .18”
Prime minister Khadga Prasad Oli had positioned himself as a nationalist channelling anti-Indian
sentiment and vowing to explore a closer relationship with Nepal’s giant northern neighbour,
China. Once in office, however, he tempered his stance. He honoured tradition by choosing India
as the destination for his first international visit on April 6 th 2017 – a sign of his government’s
pragmatic desire to maintain cordial relations with Nepal’s giant southern neighbour.
Nepal is offering preferential policies to Chinese companies which want to invest in the country.

18
Pant, B. (2018). Socio economic impact of undeclared blockade of India on Nepal. Research Nepal Journal of
Development Studies, 1(1), 18-27. https://doi.org/10.3126/rnjds.v1i1.21270
For example, there is a 100 per cent [corporate income tax] exemption for 10 years and 50 per
cent exemption in the following five years in the field of energy, and a 100 per cent exemption
for five years in the tourism industry when investing more than two billion Nepalese rupees. So
now the country that has remained impoverished for decades while India and China shot ahead
means that any opportunities afforded it to catch up are being embraced. So india must ralise its
mistake and should form a Pro- Nepal diplomatic policy so as to win the confidence of its
neighbor again while countering the growing influence of china in the sub continent.
6. BIBLIOGRAPHY

 The Diplomat
 The Economic Times
 Deccan Herald
 Nikkei Asian Review
 The Kathmandu Post

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