Nepal has sought India’s assistance in the development of the two more petroleum pipeline projects. Nepal wants the project to be on government to government basis to avoid technical hassles and had asked India to provide financial assistance for the project.
Nepal is a landlocked country and has no means of directly importing natural resources like petrol and diesel from oil producing nations. This increases the dependency of Nepal on India to fulfill its energy needs.
India had inaugurated a 69 km long petroleum pipeline project on September10, 2019. The pipeline runs from Motihari in Bihar to Amlekhgunj in Nepal’s Bara district. The pipeline is currently operational and has been build with India’s assistance. Under the pipeline Indian Oil Corporation(IOC) is supplying diesel to Nepal Oil Corporation (NOC)
The recent proposals forwarded by Nepal to India are for the construction of two separate pipelines. The first one would be a 52 km pipeline from Siliguri in West Bengal to Jhapa in Nepal and another 69 km pipeline connecting Amlekhgunj to Lothar in Nepal. The two pipelines would be an extension of the existing Motihari-Amlekhgunj pipeline.
The new pipelines will be beneficial for both India and Nepal. It will reduce transportation cost for Nepal as the petrol and diesel would directly reach oil depots through pipelines. According to Pradip Yadav, chief of the Amlekhgunj Nepal Oil Corporation Depot “The pipeline will save around Rs 2 billion in transportation cost annually and another Rs 1 billion in leakage costs,”
The construction of these pipelines by India is seen as a counter to China who is rapidly making inroads into Nepal. Nepal has always acted as a buffer state between two major powers of south Asia. The growing presence of China in Nepal will be a serious national threat for India.
China wants Nepal to come under its sphere of influence. For this China is investing heavily in Nepal for the construction of roads and railway lines. China wants to connect Chinese cities to Nepal for transporting petroleum and other products. This is done by China to reduce Nepal’s dependency of petroleum products on India.
The importance of the India-Nepal petroleum pipeline is manifold. It will reiterate India’s stand of considering Nepal as its developmental partner unlike China who has debt trapped many smaller countries, the best example being Sri Lanka. The pipelines will boost mutual trust between India and Nepal.
India needs to drop its sluggish attitude when it comes to completion of projects in Nepal. Like the Motihari-Amlekhgunj oil pipeline project which was proposed for the first time in 1996, remained neglected for years. It was only accelerated after Prime Minister Narendra Modi visited Nepal in 2014.
This way of working will hamper India’s credibility in completion of projects in Nepal. If India wants to block Chinese inroads into Nepal, it will need to work proactively on the projects.
China has allowed Nepal to use its ports in order to facilitate Nepal’s trade. Nepal being a landlocked country rely on Indian ports and routes for international trade. This was being done by China to reduce Nepal’s dependency on India for trade.
Nepal needs to be cautious in dealing with China. China under the veil of preventing the spread of Covid-19 had imposed an ‘undeclared’ blockade of Nepal by prohibiting the Nepalese to use these ports. The blockade has been imposed by China as a move to show China’s dislike for the inclination of Prime Minister Sher Bahadur Deuba towards India.
Nepal has been a traditional partner of India. The countries share cultural as well as religious similarity and had maintained a visa-free travel policy for its citizens. China is actively trying to reduce Indian influence and make inroads for itself in Nepal, which will pose a security threat for India. India needs to proactively counter Chinese policy in Nepal if it wants to maintain its influence there.