Prakash Sharan Mahat, Foreign Minister of Nepal, was in New Delhi recently to hold bilateral talks when he met the Minister of State for External Affairs, V.K. Singh, National Security Adviser Ajit Doval, Finance Minister Arun Jaitley, and officials of the Reserve Bank of India and discussed a wide range of issues. Excerpts from an exclusive interview to The Hindu.
What has been the impact of Indian demonetisation on Nepal?
We recognise the primary intention of the Prime Minister of India in introducing demonetisation. But Nepal’s concern is that we need new Indian currency for daily transaction with India, for export-import and for exchange with the major economies of the world.
Second, we are facing a serious situation as both the public as well as the Nepali state had old Indian currency which will be wasted unless exchanged for new Indian currency. The RBI wanted to know the exact estimate of how much of old currency Nepali citizens hold. We do not have such an estimate. But I think we can begin after RBI makes a provision for exchange of old Indian currency notes in Nepal. We have assured RBI and Finance Minister Arun Jaitley that we will not allow anyone with Indian black money to come to Nepal and deposit it through our banks.
What has been the Indian position on Nepal running short of Indian currency for state expenses?
Mr. Arun Jaitley was very sympathetic to our issues. He assured us that his ministry will look into the matter.
Nepal tabled the amendments to the Constitution but now seems to be going slow on them.
We are trying to reach a consensus with the opposition parties on the amendments that were tabled in Parliament. We are trying to reach every section of society so that the constitutional issues are resolved to every segment’s satisfaction. The Constitution that we achieved in 2015 was an inclusive one. Yet some people had objection to it. But we are confident that the national will that we displayed in dealing with the earthquake and then political instability will help us achieve this important task which will complete the process of democratisation in Nepal.
But is the political situation in your favour for carrying out the amendments that require a two-third parliamentary majority?
After our consultations since the tabling of the amendments in Parliament we have finally begun to receive some positive signals. Madhesis and the opposition are more flexible now. We believe that no one should stick to their position for long demanding that everything should be done their way all the time. The Madhes-centric parties should realise this change. This kind of inflexible policy is not acceptable to us. We are all Nepalis and we should reach a consensus fast for the sake of our country. We are confident that we will be able to do it. But we are going beyond and will hold elections at all the three levels in Nepal — central, provincial and local levels. This is an ambitious task that we have taken.
What is the major point in those Constitution-related proposals?
We have promised proportional representation for the Madhesis in the upper house of Parliament. That apart, we have proposed to separate the hilly areas from the fifth province which will have only the Madhesi region in it. But as I said, the main issue is the mindset, which should be flexible and open to negotiation. For example, I did not agree with many of the provisions of the Constitution when it was promulgated.
So you are asking the Madhesis to change their core demands on amendments such as proportional representation and the redrawing of provincial boundaries?
Yes. Every party should be flexible. The major parties in the centre (Kathmandu) as well as the Madhes-centric parties should understand that to reach consensus on the constitutional amendments and other critical issues, there will be a need for compromise by all.
But one of the major issues is the demarcation of provinces as defined by the present Constitution, which was rejected by the Madhesi parties. So how do you intend to complete the election with unsettled provincial boundaries?
We will not let these issues stand in our way. We have the old provincial boundaries and for this round of elections we will go ahead with the support of Parliament. Most important of all, our election commission is ready for the task. We have already enumerated the best solution in the proposals that were tabled in Parliament and I hope the Madhesi parties accept them as they should not adopt the position that they have to win at every step.
You are asking the Madhesis to scale down their demands?
All that I am saying is that our position is in the interest of the Madhesis and the other communities of Nepal. But if one Madhesi party exaggerates issues and tries to play with raw emotions, we will not allow that because we are Nepalis first and we have to build consensus in our society which has passed through challenging times.
Why this hurry to hold the election at all three levels?
Why not? Because our election machinery is ready. The only thing is that we need to have a political consensus, which has already begun to form. We have given a timeline for ourselves. We will hold local-level elections in April-May and follow it up with provincial election by September-October and by the end of the year or latest by January-February 2018, we will hold the central- level elections. We have been working on a few formulae for the election. For elections, everyone is ready. However, such a consensus is not there for the amendments. So we will go for elections first.
Why is anti-dumping duty emerging as a major issue in Nepal-India ties?
We export a tiny amount of jute to India. Nepal’s export of jute products to India is less than 2% of India’s total amount. This also reflects the present unfavourable trade ties between Nepal and India. But India has imposed anti-dumping duty on us which is affecting our ability. This is a problematic issue as apart from the anti-dumping duty, they have also imposed counter-veiling duty of another 5%. That apart, Indian rules are preventing traders from using Nepali jute products in their work. Imposition of the duties is against the spirit of the Nepal-India friendship treaty. We have raised these issues and India has assured us that these will be addressed.
