India’s Neighbours
Afghanistan
India closely monitored the continuing fratricidal conflict in Afghanistan, a country with which it has historical ties of friendship and cooperation. India maintained close contacts with various parties and groups within Afghanistan. India believes that there can be no military solution to the internecine war which is being fueled by foreign involvement, principally from across Afghanistan’s southern borders.
The military situation remained influx. The Taliban, consequent to the major offensives it had launched in July 1998 in Northern Afghanistan, succeeded in capturing several cities in Northern and Central Afghanistan driving out the forces of Gen. Abdul Rashid Dostum and the Hijb-e-Wahdat. However, Commander Ahmad Shah Masood put up a strong resistance to the Taliban advances to his traditional areas of influence and recaptured in October-November, 1998 from Taliban control all Takhar province and some areas in Kunduz. There have also been reports of uprisings against Taliban rule in several parts of Northern Afghanistan, following which some more areas have been wrested from Taliban control.
India continued to send humanitarian assistance to Afghanistan both bilaterally and through the UN. After the devastating earthquake in Afghanistan on May 30, 1998, a plane load of relief material was sent on June 11, 1998. A consignment of 30 tonnes of vegetable oil was sent through the UN in July 1998. A consignment of medical equipments, medical supplies and medicines worth Rs. 40 lakhs was sent to the Indira Gandhi Institute for Child Health, Kabul, in October 1998. More consignments of medicines, woollens and food items will be sent in the coming months.
Iran
Based on cultural and civilisational affinities and historical interactions, India’s ties with Iran continued to grow. As a part of the process of high-level exchange of visits which have contributed to build mutual trust and confidence, Dr. Seyed Kamal Kharrazi, Foreign Minister of the Islamic Republic of Iran, accompanied by a high-level delegation, visited Delhi on June 2-3, 1998. He called on the Prime Minister and held discussions with Minister of State for External Affairs on bilateral, regional and international issues. Prime Minister had an occasion to review bilateral relations and to discuss issues of mutual interest with President Khatami on the sidelines of the NAM Summit at Durban in September 1998. Iranian President's Special Envoy on Afghanistan, Alaeddin Broujerdi, paid a visit to New Delhi in September 1998, for consultations on Afghanistan.
Economic and commercial interaction between India and Iran continued satisfactorily. The first meeting of the Indo-Iran Joint Business Council was held in Tehran in May 1998 and the second meeting at New Delhi on February 24, 1999, with the active participation of apex Chambers of Commerce and Industry in the two countries to explore the possibilities of increased trade, investment and setting up of joint ventures Iranian Foreign Minister, Dr Kharrazi visited India on February 23-25, 1999 to co-chair the Tenth meeting of the Indo-Iran Joint Commission along with External Affairs Minister. Besides discussions on bilateral, regional and international issues of mutual interest during Dr Kharrazi’s meetings with President, Prime Minister, External Affairs Minister, Commerce Minister and Minister of Petroleum & Natural Gas, the two side reviewed the progress of bilateral co-operation in agriculture & rural development, energy, industry, trade, transportation & communication, cultural, consular, information and science & technology areas. It was decided to further expand and intesify bilateral ties in these fields and institute a mechanism for regular consultations between the Foreign Offices of the two countries.
Pakistan
Overview
Prime Minister Shri Atal Behari Vajpayee took a historic initiative to visit Lahore on February 20-21, 1999 on the inaugural run of the Delhi-Lahore-Delhi bus service. His visit was part of India‘s consistent efforts to build peaceful, friendly and cooperative ties with Pakistan and establish a relationship based on mutual respect and a regard for each other‘s concerns. Earlier, the resumption of the official dialogue between the two countries in October 1998 marked a success in India's endeavours to engage Pakistan in a composite and comprehensive dialogue process that would build trust and confidence, explore avenues of mutually beneficial cooperation and address outstanding issues. A crucial element in Pakistan’s attitude and approach towards India, however, was its engaging in terrorism, firing across the international border and Line of Control in Jammu and Kashmir and hostile propaganda.
Prime Minister’s Visit
India‘s basic policy approach towards Pakistan was underlined by Prime Minister Shri Atal Behari Vajpayee‘s declaration that a stable, prosperous and secure Pakistan was in India‘s interest. This sentiment was reaffirmed by him from the Minar-e-Pakistan in Lahore on February 21, 1999. Prime Minister‘s visit was the most significant engagement between India and Pakistan in over a quarter of a century. It was also the first visit undertaken by the Prime Minister of India to Pakistan in a decade. During his visit, the Prime Minister conveyed to the Government and people of Pakistan India‘s deep desire for peace and friendship with them and for developing a comprehensive structure of cooperation for the benefit of the two peoples. The Prime Minister and the Pakistan Prime Minister signed the Lahore Declaration which is a landmark for peace and security of the two countries. A Memorandum of Understanding was also signed by the Foreign Secretaries under which India and Pakistan will work to enter into agreements to put into place far-reaching Confidence Building Measures. In a Joint Statement issued on the occasion, the two countries also identified new and significant areas of cooperation such as Information Technology and decided to address humanitarian issues at a ministerial level on an urgent basis. India expects that the Prime Minister‘s historic initiative for the welfare of the peoples of the two countries will mark a new chapter in our bilateral ties.
Resumption of Official Dialogue
Prime Minister had met Pakistan Prime Minister Mr Nawaz Sharif on the sidelines of the Tenth SAARC Summit at Colombo (29 July, 1998) and in New York (23 September, 1998). During these meetings, Prime Minister urged Pakistan to work with India to develop trust and confidence, avail of the many opportunities for mutually beneficial cooperation and address outstanding issues. Prime Minister also emphasised that Pakistan‘s instigation of and support to terrorism against India were incompatible with the development of peaceful and friendly relations and that these activities must cease immediately.
During Prime Minister‘s meeting with Prime Minister Mr Nawaz Sharif in New York on 23 September, 1998, the Foreign Secretaries of India and Pakistan reported to the two Prime Ministers that they had reached an agreement on the modalities of the dialogue process. (The subjects for the dialogue were agreed upon in June 1997 and are: Peace & Security including CBMs, Jammu & Kashmir, Siachen, Tulbul Navigation Project, Sir Creek, Economic and Commercial Cooperation, Terrorism and Drug Trafficking and Promotion of Friendly Exchanges in various fields). The Prime Ministers welcomed this development and issued directions for the resumption of the dialogue.
The first round of the composite dialogue process was held in October and November 1998. The subjects of Peace & Security including CBMs and Jammu & Kashmir were discussed by the Foreign Secretaries in Islamabad in October 1998. The subjects of Tulbul Navigation Project, Siachen, Sir Creek, Economic and Commercial Cooperation, Terrorism and Drug Trafficking and Promotion of Friendly Exchanges in various fields were discussed, respectively, by the Secretary, Water Resources of India and Secretary, Water and Power of Pakistan; the Defence Secretaries; the Surveyor General of India and Additional Secretary, Ministry of Defence, of Pakistan; the Commerce Secretaries; the Home Secretary of India and the Interior Secretary of Pakistan; and the Culture Secretaries, in New Delhi in November 1998.
During talks on Peace & Security including CBMs, India drew Pakistan‘s attention to India‘s security needs which were a function of its size and assets. India emphasised that its security concerns were not one-country specific and that its defence profile was non-aggressive. In this context, India proposed the upgradation of existing CBMs and the need to put in place new CBMs, ranging from information exchange and improved communication links to exchanging views on security concepts and nuclear doctrines. India also emphasised the need to build mutual confidence in the nuclear and conventional fields.
During discussions on Jammu & Kashmir, India made it clear that the legal status of Jammu & Kashmir, i.e. that the entire State is an integral part of India, is clear and does not admit of any change. India also demanded that Pakistan cease forthwith its futile instigation and sponsorship of terrorism in Jammu & Kashmir, which constituted a flagrant violation of the provisions of the Simla Agreement.
During talks on the Tulbul Navigation Project, India drew Pakistan‘s attention to understandings that had been reached during earlier discussions on this subject and that can be the basis for a resolution of the issue. During discussions on Siachen, India stressed the need for a cease fire in the area as a first step. On the subject of Sir Creek, India proposed that, pending agreement on the land boundary, the maritime boundary could be demarcated by starting at sea and proceeding landwards.
At the discussions on Terrorism and Drug Trafficking, India gave Pakistan detailed evidence regarding its role in sponsoring terrorism against India and demanded that Pakistan close down training camps for terrorists and hand over terrorists and fugitives from the law who have been given sanctuary in Pakistan.
During discussions on Economic and Commercial Cooperation, India emphasised that there were many avenues for mutually beneficial cooperation including in areas such as electric power and transportation. Detailed discussions on the technical, legal and financial aspects at the expert-level have taken place in Islamabad and New Delhi on the subject of purchase of power by India from Pakistan. These discussions are continuing.
On the subject of Promotion of Friendly Exchanges, India proposed a cultural exchange programme which would build on the commonalities between the two countries. India also emphasised the need of regular contacts to address humanitarian issue relating to fishermen and civilian prisoners and people-to-people contacts.
India released a total of 149 Pakistani fishermen in its custody. It also proposed to Pakistan that the fishermen of the two countries who stray innocently into the territorial waters of the other country should not be kept in custody but should be released on completion of formalities. Acting on this principle, India conveyed to Pakistan on 2 November 1998 its decision to release 40 Pakistani fishermen who were captured on 24 October, 1998. Pakistan also released 190 Indian fishermen who were held in its custody.
India took the initiative to start a Delhi-Lahore-Delhi bus service. An agreement and a protocol for the regulation of this service were signed in Islamabad on 17 February, 1999. Trial runs of an Indian bus to Pakistan and a Pakistani bus to India had been held in January 1999.
Pakistan's Support to Terrorism
Pakistan‘s support to and involvement in terrorist activities in Jammu & Kashmir and other parts of India continues unabated. This was strongly taken up by Prime Minister during his visit to Pakistan, and also by Foreign Secretary and Home Secretary during the dialogue process. It was pointed out that the atmosphere generated by the open exhortation of terrorist actions in India by fundamentalist organisations in Pakistan, many of which enjoyed official patronage, was not conducive to a normalisation of bilateral relations. India urged that Pakistan take urgent steps to demonstrate its commitment to tackling the issue of terrorism.
Pakistan‘s Nuclear and Missile Programmes
India has carefully been following Pakistan‘s pursuit of clandestine weapons oriented nuclear and missile programmes, which have been developed with assistance from abroad. On 6 April, 1998, Pakistan announced the successful test of a ballistic missile, the Hatf V (Ghauri). Pakistan also announced that it had conducted tests of six nuclear devices on 28-30 May, 1998. It said that the tests were in reaction to India‘s nuclear tests carried out earlier in May 1998. In response to these tests, Government of India‘s official spokesman said that this event vindicated India’s assessment regarding the nature of Pakistani programme and policy as well as the measures India had taken. He also said that Government of India had taken all steps necessary for safeguarding the nation's security.
Conclusion
India seeks a relationship of trust, friendship and cooperation with Pakistan. Our approaches to Pakistan are rooted in our national consensus, which favours moving relations ahead with Pakistan over a broad front through the composite dialogue process. These approaches derive their strength from our confidence as a mature nation dedicated to peace, democracy and freedom. It is our earnest hope to build-on the opportunities that are now available on account of the Prime Minister‘s initiative and his commitment to put behind past connections and think of the welfare of coming generations. The Lahore Declaration and the Memorandum of Understanding on Confidence Building Measures and the Joint Statement are significant developments in our bilateral relations. We trust Pakistan will fully reciprocate our initiatives and abandon the path of confrontation and promotion of terrorism in India.
Bangladesh, Myanmar, Maldives and Sri Lanka
India’s relations with its eastern and southern neighbours– Bangladesh, Myanmar, Maldives and Sri Lanka – reflected a continuity of policy and approach in the development of close understanding and active collaboration in mutually beneficial development efforts. There was focus on sectors of specific interest to each of the countries concerned covering a wide range of areas. Equally important was the sustained dialogue covering ongoing matters of operational importance such as border management. The economic and social dimensions however provided the thrust for progress in increased engagement.
Bangladesh
There was mutual keenness on the part of both India and Bangladesh to promote understanding and to strengthen bilateral relations during the year. Several high level visits contributed to this process.
The foreign Minister of Bangladesh, Mr Abdus Samad Azad, visited India in April 1998 as the Special Envoy of the Bangladesh Prime Minister, to greet the new Government. The Bangladesh Prime Minister, Mrs Sheikh Hasina visited India on June 16, 1998; at the talks held during the visit, both sides agreed on the need to intensify the existing warm and cordial relations between the two countries and to increase interaction at various levels through economic and cultural exchanges, parliamentary delegations, students, and cultural groups.
The two Prime Ministers met again on the sidelines of the 10th SAARC Summit at Colombo in July 1998. The foreign Secretary visited Bangladesh in June 1998 for Foreign Office consultations and held wide ranging discussions on bilateral, regional and international issues. Trade review talks took place in Dhaka in December 1998; the Indian delegation was led by the Commerce Secretary. The talks were positive in nature and covered a number of areas related to the growth of bilateral economic interaction and infrastructure development.
The system of institutional dialogue to discuss matters relating to security and border management continued during the year. Two sessions of talks between the Directors General of the Border Security Force and the Bangladesh Rifles were held in May and October 1998. The 5th meeting of the Joint Working Group took place in New Delhi in August 1998. The Home Secretary visited Dhaka in November 1998. Issues covered during these talks related to security, insurgency, illegal immigration, border management and the visa regime. The talks too place in a constructive spirit while taking into account mutual concerns.
Bangladesh was gripped by devastating floods for the longest duration recorded. There was widespread loss of life and property with a particularly negative impact on agriculture, and Bangladesh made an appeal for international aid. The Government of India rushed over 7.5 tonnes of medicines worth Rs. 40 lakhs to Bangladesh by air. India also gifted 20,000 tonnes of par-boiled rice worth Rs. 22 crores and over 800 tonnes of wheat and maize seeds worth Rs. 2.2 crores.
India’s relations with Bangladesh are thus close, friendly and extensive. There is widespread people-to-people contact as established by the fact that the High Commission of India in Dhaka issues an average of 1000 visas daily. Thousands of students from Bangladesh pursue higher studies in India. There were many cultural exchanges both under governmental and private auspices. India provided training to several technical personnel from Bangladesh.
The Bangladesh Prime Minister visited Calcutta to inaugurate the 24th Calcutta Book Fair on January 27-28, 1999. An Indian Trade Fair is being organised in Dhaka on March 9-15, 1999.
Sri Lanka
India’s relations with Sri Lanka continued to be marked by warmth and cordiality. The visits of the Sri Lankan Foreign Minister, Mr Lakshman Kadirgamar, to India in March and June 1998, as a Special Envoy of the Sri Lankan President provided opportunities for useful, high level exchanges between the two Governments. Both sides reaffirmed the consensus prevailing in both countries on maintaining close and cordial relations. The Sri Lankan leader of the Opposition, Mr Ranil Wickremesinghe, visited India in April 1998. The Prime Minister’s visit to Colombo from 28-31 July, 1998 to attend the Tenth SAARC Summit helped to further cement the multifaceted ties between the two countries.
The President of Sri Lanka, H.E. Mrs Chandrika Bandaranaike Kumaratunga, paid a state visit to India from December 27-30, 1998. During the visit, the two sides signed an agreement to establish a Free Trade Area between India and Sri Lanka. The agreement is expected to lead to a steady growth of trade and investment through graduated reduction of tariffs. The two countries also signed a Memorandum of Understanding to set up the India-Sri Lanka Foundation. The Foundation would promote bilateral exchanges in various spheres and would be governed by an independent board.
The deliberations during the visit reflected the priority attached by both countries to sustaining the warmth and understanding that mark the India-Sri Lanka relationship.
Earlier, the fourth Session of the India-Sri Lanka Joint Commissions met at New Delhi on December 18, 1998. The Indian delegation was led by the Minister of External Affairs, while the Sri Lankan Minister of Foreign Affairs, Mr Lakshman Kadirgamar led the Sri Lankan delegation. The Joint Commission reviewed the existing levels of bilateral cooperation in the areas of science & technology, economy, trade & investment, and cultural, educational & social matters. Both sides agreed on further programmes to broaden and deepen bilateral exchanges.
Bilateral trade between the two countries showed an upward trend. India continued to provide trade concessions to Sri Lanka within the SAPTA framework with a view to improving market access for Sri Lankan products in India.
Both sides continued their dialogue on problems faced by fishermen of the two countries with a view to finding appropriate solutions to the problems. Both countries agree on the need to deal with these problems in a spirit of compassion and understanding.
Maldives
India-Maldives relations continued to remain close and friendly. India kept up assistance to the Maldives in its developmental efforts including in the area of Human Resource Development. There was regular interaction through the exchange of high level visits.
President Maumoon Abdul Gayoom visited India in his capacity as Chairman of SAARC from June 30 to July 1, 1998. The Vice President visited the Maldives from November 10-13, 1998 to represent India at President Gayoom’s swearing-in ceremony on November 11, 1998, for a 5th consecutive term following a national referendum held on October 16, 1998.
Mr Suresh P Prabhu, Minister of Environment and Forests attended the Seventh Session of the Governing Council of the South Asia Cooperative Environment Programme (SACEP) in Male from April 20-23, 1998. An expert team from India visited Maldives from July 4-9, 1998 to study the feasibility of setting up in Maldives an Institute of Hotel and Catering Services. India provided technical training to a large number of Maldivian candidates in diverse fields including medicine, engineering, computer science and agriculture under its technical assistance and scholarships scheme.
Mr Ibrahim Hussain Zaki, Minister of Tourism, Mr Abdul Rasheed Hussain, Minister of Planning, Human Resources and Environment, Mr Mohammed Latheef, Minister of Education and Mr Ahmed Abdulla, Minister of Health, Government of Maldives visited India during the year for international meetings. These visits were also used for bilateral discussions.
Myanmar
India has a stable and cooperative relationship with Myanmar. Focussed efforts were made to diversify and broadbase areas of contact and cooperation. An MOU on Cooperation in the field of Agriculture and Allied Sectors was signed during the visit to Yangon (April 22-25) of the Minister of State for Agriculture, Shri Som Pal. As a follow up to the MOU, a work Plan was finalised during the visit to India (August 16-25) by the Myanmar Agriculture Minister. The Commerce Secretary led an Inter-Ministerial delegation in October and was accompanied by a business delegation to Yangon to explore ways and means of expanding trade and economic linkages including cross border projects in areas such as power, mining and oil & gas. The Myanmar Deputy Minister for Industry-2 visited India in November to identify sectors for collaboration. Possibilities of cooperation in the fields of science & technology, herbal medicines, satellite telecommunication etc. are being explored. A number of Myanmar nationals received training at Indian institutes.
In areas of vital interest such as border management and drug-trafficking, regular interaction was maintained through bilateral institutional mechanisms. The Home Secretary led the Indian delegation for the Fifth India-Myanmar National Level Meeting held in Yangon (April 26-29). The sectoral level dialogue took place in January, 1999, to discuss issues related to border management.
Bhutan and Nepal
India’s traditional friendship and cooperation with its northern neighbours, Bhutan and Nepal, have continued to grow and strengthen over the years, reflecting the firm foundations and essential stability of the bilateral relationships. These bilateral relationships have traditionally been based on mutual understanding, respect and goodwill. Mutually beneficial economic cooperation between the two countries has grown steadily over the past few years and has provided substance to India-Bhutan and India-Nepal relations.
During the period under review several initiatives were taken with a view to further enriching and consolidating these relationships. In particular, India’s economic cooperation programmes with Bhutan and Nepal, and trade and commercial relations developed satisfactorily, with steps being taken to liberalise and improve the procedures and bilateral arrangements in these sectors. The renewal of the Transit Treaty with Nepal with an automatic renewability clause, in particular, has contributed to developing business and investment confidence.
India’s bilateral relationship with both Bhutan and Nepal is characterised by frequent interaction at both political and official levels, and this trend continued during the period under review with several high-level exchanges of visits served to provide direction and impetus to India’s relationships with both its northern neighbours.
Nepal
The President of India Shri K R Narayanan made a State Visit to Nepal from 28-30 May, 1998. He was accompanied by Minister of Commerce Shri R K Hedge and four Members of Parliament. During his visit, the President held discussions with His Majesty the King, and received the Prime Minister and leaders of major political parties of Nepal, academics, intellectuals and business leaders.
Their Majesties King Birendra Bir Bikram Shah Dev and Queen Aishwarya Rajya Laxmi Devi Shah of Nepal paid a State Visit to India from 24-29 January, 1999 at the invitation of the President of India. The King was the Chief Guest at the Republic Day celebrations on 26 January, 1999. During the visit, the King called on the President and also had separate meetings with Vice-President, Prime Minister, External Affairs Minister, Home Minister and Commerce Minister.
Both the above State Visits were highly successful in underlining the goodwill and warmth that characterise our bilateral ties with Nepal, and have contributed to the consolidation of friendship and understanding between the two countries.
Among the other high level bilateral contacts, notable are Prime Minister Shri A B Vajpayee’s meetings with his Nepalese counterpart Mr G P Koirala on the fringes of the NAM Summit in Durban and the SAARC Summit in Colombo. Discussions between the two Prime Ministers encompassed a wide gamut of bilateral, regional and international issues of common interest.
The 2nd Meeting of the Joint Working Group (JWG) on Border Management was held in Delhi on 16 & 17 June, 1998. A number of decisions with the objective of preventing misuse of the open border between India and Nepal by undesirable elements were taken by the two sides. The meeting was followed by Home Secretary level talks on 18 June, 1998 that, inter alia, reviewed the decisions taken by the JWG.
The first Director General level talks on Customs Cooperation were held in New Delhi on 15 & 16 June, 1998. The Nepalese delegation was led by their Director General, Customs and the Indian side by the Director General, Department of Revenue Intelligence. It was decided that such bilateral DG level meetings should be held on a regular basis to monitor and effectively combat smuggling activities across the open India-Nepal border.
A 3-member Nepalese delegation headed by their Director General, Taxation attended the 2nd Meeting of the India-Nepal Joint Commission set up under the Double Taxation Avoidance Agreement (DTAA) held in New Delhi from 28-30 July, 1998. The Meeting was useful in so far as the two sides had an exchange of views on specific issues relating to DTAA, with the objective of further strengthening bilateral cooperation in this area.
In pursuance of the Memorandum of Understanding on Agricultural Cooperation signed between India and Nepal in December 1991, the 3rd Meeting of the India-Nepal Joint Agricultural Working Group (JWG) was held in Kathmandu from 5-7 August, 1998. The Meeting reviewed the progress on the decisions taken at the 2nd JWG meeting held in New Delhi in December 1996 and finalised the biennial Work Plan for the years 1999 and 2000.
The Deputy Prime Minister of Nepal, Ms Shailaja Acharya paid a private visit to India in September 1998, during which she called on the Prime Minister of India and discussed various bilateral issues of mutual concern. On a separate visit to Bihar from 22-26 October, 1998, Ms Acharya participated in the inaugural ceremony on the occasion of the 29th Anniversary of the Vishwa Shanti Stupa at Ratnagiri Hill, Rajgir held on 25 October, 1998.
The 21st Meeting of the Joint Technical Level India-Nepal Boundary Committee (JTC) was held in New Delhi on 26 & 27 November 1998. At the Meeting, the two sides reviewed the progress in the implementation of the decisions taken at 20th JTC Meeting and recommended specific actions for the timely completion of the Indo-Nepal boundary tasks. The 5th Meeting of the Joint Working Group (JWG), constituted by the Joint Technical Level India-Nepal Boundary Committee (JTC), was held in Kathmandu on 15 & 16 July, 1998. The Meeting reviewed the progress in the implementation of the recommendations of the 4th JWG Meeting, 20th JTC Meeting and Survey Officials Meeting (SOM) held during May 1998.
India attaches high priority to the development of economic and commercial ties with Nepal. Successive reviews of bilateral trade & transit arrangements were held during Commerce Secretary level talks at New Delhi in March, September and November 1998. The agenda covered a gamut of issues in this area, in particular, the operation of the new road transit route from Nepal to Bangladesh via Phulbari, and the renewal of the Treaty of Transit between the two countries.
A renewed Transit Treaty between India and Nepal was signed on 5 January. 1999 in Kathmandu by Commerce Minister Shri Ram Krishna Hegde and his Nepalese counterpart Mr Purna Bahadur Khadga. The renewed Treaty, valid for a period of seven years up to 5 January, 2006, will be automatically extended for further periods of seven years at a time, unless either of the parties gives written notice of its intention to terminate the Treaty six months in advance. A Protocol and a Memorandum to the Treaty containing the modalities and other arrangements were also signed. These would be subject to review and modification every seven years or earlier, if warranted.
India’s contribution to Nepal’s economic development in diverse areas has increased over the years. Major projects funded by the Government of India currently under implementation include the construction of 22 bridges on the Kohalpur-Mahakali sector of the East-West Highway, establishment of the B P Koirala Institute of Health Sciences at Dharan, construction of an Emergency and Trauma Centre at Bir Hospital in Kathmandu, broad-gauging of Raxaul-Sirsiya Rail Link and several other projects that form part of India’s commitment under the mahakali Treaty. A High Level Task Force (HLTF) monitors the progress in bilateral relations and oversees Indian assisted projects in Nepal.
Initiatives taken by the Government of India to liberalise the trade and investment regime with Nepal are expected to provide a boost to bilateral economic exchanges in the coming years. Indian investments as of date accounted for over 40% of total foreign investments in Nepal. Bilateral trade during 1997-98 amounted to Rs. 946 crores. For the period April-August 1998, the two-way trade was Rs. 409 crores, while the figure for the corresponding period in the previous year was Rs. 346 crores. An interesting development is the sharp increase in Indian imports from Nepal during the first five months of 1998-99, with the figure reaching Rs. 249 crores, as compared to Rs. 108 crores registered in April-August 1997.
A large number of Nepalese students continued to avail of academic and training facilities in India. Several scholarship schemes, such as the Silver Jubilee Scholarship and the B P Koirala Foundation Scholarship supplemented normal scholarships and self-financing opportunities for studies in India offered by the Government of India to Nepalese students in diverse fields, notably engineering, medicine and technical areas. Specific professional training and orientation programmes were also conducted for select candidates from Nepal under the Nepal Aid Scheme. A large number of Nepalese students also directly sought admission to schools and colleges in India on a special concessional basis.
Bhutan
His Majesty Jigme Singye Wangchuck, the King of Bhutan visited India from 5-8 October, 1998. Discussions that the King held with the President, the Vice President, Prime Minister, External Affairs Minister and other senior Cabinet Ministers, provided an opportunity for a wide ranging overview of the bilateral relationship.
The Minister of Power, Shri P K Kumaramangalam led a high level delegation to Bhutan from 26-29 October, 1998 to discuss issues relating to development of hydel power in Bhutan.
The 5th Joint Technical Level Meeting on the Bilateral Survey Collaboration Project was held in Thimphu from 6-9 August, 1998. This project aims at developing indigenous capacity in Bhutan for survey and mapping, and includes supply of equipment and technology transfer in this field.
To Bhutan’s 8th Five Year Plan (1997-2002), as in previous Plans, Indian assistance has focussed on areas of infrastructure such as the construction of roads, bridges and hydro-power capacity. Special emphasis has also been placed on the implementation of projects in social sectors such as education and health. Larger projects that are being jointly developed with the Royal Government of Bhutan include the Tala Hydroelectric Project, Kurichu Hydroelectric Project and the Dungsum Cement Project.
Following the outbreak of fire in the famous Taktsang Monastery in Bhutan, the Government of India contributed an amount of Rs. 25 lakhs in April 1998 towards the cost of reconstruction of the Monastery.
Cooperation between the two countries in the areas of culture and education has been noteworthy. A number of Bhutanese students availed of scholarships provided by the Government of India in technical areas such as agriculture, engineering and medicine. Under the bilateral Cultural Exchange Programme, there are regular visits of cultural troupes and artistes between the two countries.