Nepal’s Prime Minister Dr Baburam Bhattarai feels that his ongoing visit to India has been ‘very productive’ and he has succeeded in his key aim of ‘building trust’ between the two countries. This, he says, has created the new basis to take India-Nepal relations forward.

Speaking to a select group of journalists, of which The Hindu was the only Indian media outlet, Dr. Bhattarai said that his conversations with Indian leaders broadly revolved around the Nepali political transition, Indian security concerns, and economic co-operation between the two countries.

On Friday evening, Dr Bhattarai and Prime Minister Dr Manmohan Singh had a 30 minute one-on-one interaction, where they discussed a range of issues. Dr. Bhattarai said, “The Indian PM’s first concern was the completion of the peace process and constitution, since without that, political stability in Nepal would be elusive. I apprised him of recent positive developments in the peace process, and assured him we are close to completing it.”

India raised its traditional security concerns, which are sharpened because of the open border. The Nepal PM said he had assured India that Nepal wants good relations with both its neighbours, and ‘will not allow Nepali soil to be used against its neighbours’. The two also talked about expanding economic co-operation, with Dr. Bhattarai emphasizing that they wanted to attract capital and technology from outside, particularly India.

To enable these investment flows, the two sides also signed the Bilateral Investment Promotion and Protection Agreement (BIPPA) which assures investors of one country that they will be compensated in case of investment losses in the other country due to wars, riots, insurrections, armed conflict. Dr. Bhattarai said he was aware that there will be a domestic backlash in Nepal, referring to criticism that the agreement will spell huge liabilities for the Nepali state.

“I have taken a risk, but if you don’t take risks, the country cannot develop. We are at the stage of capitalist development. If we want double digit growth, wish to raise the per capita income of citizens to $3000 in ten years, and develop, this is the only route. It will create conducive environment for investment.” The Prime Minister clarified that the Double Taxation Avoidance Agreement, which was on the agenda, could not be signed because of ‘miscommunication’ between the two countries.

In talks between the two delegations, Nepal proposed the formation of an EPG to review the broad gamut of bilateral relations, including its economic and strategic parts, and past treaties. Kathmandu had also given a non-paper to New Delhi about the initiative. India has welcomed the idea. Four persons from each country will be nominated to the group, which will submit its report with a year to both governments.

The Prime Minister said he was encouraged by the general positive reaction to his visit. “There have been suspicions between Maoists and Indian establishment in the past. Even though I was coming as PM, it is natural that Delhi saw it as a Maoist PM coming. This has helped create trust. The positive reaction from civil society is important for bilateral relations.”