Nepal Assures Commitment to Peace Process 

By Anjana Pasricha
New Delhi
20 August 2009

The Nepalese prime minister, who is visiting India, says his country is committed to pushing ahead with a peace process at home. The Nepalese leader also pitched for more Indian investment in the landlocked, Himalayan nation as both countries discussed a new trade pact. 

Nepalese Prime Minister Madhav Kumar Nepal told top Indian officials his government will meet a deadline for May, next year, to draft a new constitution for the country.

Indian FM S.M. Krishna, left, shakes hands with Nepalese PM Madhav Kumar Nepal, in New Delhi, India, 19 Aug 2009

Mr. Nepal's visit to India is his first overseas trip since the country was plunged into political instability following the resignation of his predecessor, Maoist leader Pushpa Kamal Dahal, three months ago. His resignation has triggered fears that Nepal's peace process may be disrupted by the Maoists.  

But the Nepalese leader is optimistic that the country is on track to return to peace and stability. He is urging Indian businessmen to step up investments in the country in areas such as infrastructure, energy, education and health.

He reassured investors who have been wary of strikes and disruptions faced by businesses in the past, that his government is committed to improving security so that it can attract greater investment from India.

"India has been our major development, trade, investment and economic partner. Our share of exports and imports is very high with India," said Mr. Nepal. "A substantially high portion of foreign investment in Nepal comes from India."

India accounts for nearly half of all foreign investment in Nepal, and bilateral trade has jumped ten fold, in the past decade, to $2 billion, this year.

During Mr. Nepal's visit, India has announced new investment in three rail and road projects, which will improve links between the two countries.

India, which worried about growing Chinese influence in Nepal while the Maoists were in power, has assured the Nepalese leader of New Delhi's development support. 

Indian Foreign Minister S.M. Krishna says India will expand economic cooperation with Nepal.

"I reiterated India's desire that Nepal has a special relationship with India and we would like to broaden that relationship and we would like to bring economic content to the relationship," he said.

However, both countries have been unable to finalize a new trade pact, apparently because of Indian objections to allowing third countries to import products to India via Nepal. Discussions will continue.

The Nepalese leader will wrap up his five-day visit to India, Saturday.