Why Indian blank cheque on 1950 treaty hasn't been encashed by Nepal

During his visit to Nepal in early August, Prime Minister Narendra Modi gave a virtual blank cheque to Nepal to come up with a proposal to revise or replace the 1950 Treaty of Peace and Friendship between the two countries.

During his visit to Nepal in early August, Prime Minister Narendra Modi gave a virtual blank cheque to Nepal to come up with a proposal to revise or replace the 1950 Treaty of Peace and Friendship between the two countries - a long standing demand of Nepal's parties. Over two months later, top Nepal government sources have admitted no movement has taken place on this front due to 'absence of clarity' in Kathmandu itself about what it wants from its relationship with India.

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Officially, Nepal has sought more time. Dinesh Bhattarai, PM Koirala's foreign policy advisor, told HT from Kathmandu over the phone, "We have begun a process of internal homework and inter ministerial coordination to come up with a proposal. Relationship with India is of very high priority for us, but there are also other pressing issues at the moment. We are managing it all."

The treaty provides for a special security and economic relationship between the two countries, which has been projected in Nepal as curtailing its sovereignty - this became an emotive political issue. It also provides for reciprocal rights to citizens in each other's countries.

Other Nepal government sources, on the condition of anonymity, are more candid. One top minister belonging to Nepali Congress said, "Frankly, there is no domestic consensus or clarity on what we want from a new treaty. The 1950 framework gives us preferential treatment in India. We can live and work there, millions of our workers benefit from this clause. Nepal cannot afford to lose this advantage." He added that the most important priority for the country was drafting a constitution. "We should leave it to future governments. Our mandate is to finish Nepal's political transition."

SD Muni, JNU professor emeritus and a veteran Nepal expert who has written extensively on the treaty, explains the Nepali ambivalence. "Nepal has already eroded those clauses which could potentially curtail its sovereignty - they buy arms from countries other than India; they have deprived Indians of the same rights in Nepal that Nepalis enjoy in India like ownership of property." But he adds, the clauses which benefit Nepal - like Nepali citizens enjoying preferential treatment in India - are operational. "The treaty does not restrict, but aids Nepal's growth. This is an issue of political rhetoric, regimes don't want it changed."

There has been movement on other bilateral issues after the visit though. An umbrella Power Trade Agreement between the two countries, and a Power Development Agreement allowing GMR to work on the Upper Karnali hydropower project has taken off, generating hopes that Nepal's vast power potential could finally be tapped.