Nepal’s new Maoist Prime Minister Prachanda on Monday laid out the red carpet for Indian companies to invest in the landlocked country's agriculture, tourism and power sectors.
Prachanda, whose real name is Pushpa Kamal Dahal, said Nepal’s relations with India were “crucial and vital” and it would be inappropriate to compare Kathmandu’s ties with New Delhi with that of Beijing.
“Due to our specific cultural, historical and tradition of economic inter-dependence, relations with India are crucial and vital. Although we want to develop relations with China, they cannot be compared right now and there is no question of comparison,” Prachanda told India’s corporate captains at luncheon meeting organised by industry chambers CII, Ficci and Assocham.
These words about Nepal’s relationship with India should reassure New Delhi about Prachanda’s approach given that his first visit abroad after taking office was to China.
New Delhi, on its part, is willing to set up a mechanism to do a full-scale review of the 1950 Indo-Nepal Friendship Treaty, as demanded by the Maoists.
Later in the day, Prachanda, who is on his first official visit to India, met PM Manmohan Singh and called on President Pratibha Patil and Vice-President Hamid Ansari. Singh hosted a dinner in his honour at Hyderabad House.
On the Naxalite issue, Prachanda stated, “We understand the security concerns of India and we are also very much concerned about our own security. We would have to go ahead collectively,” Nepalese PM said.
“The geo-proximity and close cooperative relationship between Nepal and India should help us realise the dream of being together and growing together,” he said.
Prachanda promised business-friendly policies and a conducive investment climate in the sub-Himalayan country.
A panel would be set up to introduce the necessary reforms in industrial policy and simplify processes of setting up a business in Nepal, he said.
“We will do all we can to ensure industrial security in Nepal,” he said. Bilateral trade between the two countries stood at $2 billion in 2007-2008.
Many Indian entities, including ITC, Ashok Leyland, Tata Motors, GMR, and National Mission on Bamboo Applications have shown interest in investing in Nepal in diverse areas such as automobiles, infrastructure and hydro-power.
Consumer goods major Dabur already has operations in Nepal, but has faced the brunt of political instability in recent years.
An Indian Council of Research in International Economic Relations (ICRIER) study says India accounted for about 40 per cent of the total foreign direct investment in Nepal.