KATHMANDU: As border economies are crucial to bilateral ties, the focus should shift away from Kathmandu and Delhi

On Sunday, there was a long queue of trucks and tankers on the Indian side of the Nepal-India border in Naxalbari waiting to enter Nepal. On the Nepali side of the border, in Kakarvitta, there were rumours of a complete shutdown of the border and the Nepal Army takeover of the Bhadrapur airport along with discussions on how night buses escorted by security forces had been vandalised.

Kakarvitta has transformed into a bustling township since the new route became operational in the mid-1970s and compared to the township across the border, it looks prosperous. But now, people in Kakarvitta are wondering what has gone wrong between Delhi and Kathmandu. What will happen to the movement of the vehicles? Is this a repeat of the Indian embargo of 1989? In truth, both the countries do not seem to understand how border towns function and how they are the backbone of the economy. The corridors of power in Delhi and Kathmandu seem to be least bothered about the issues of the border towns unless they are forced to.

Perceptions matter

India’s rise as an economic superpower is generally supplemented by the images of the high-rises in Gurgaon or the new IT firms in Bengaluru. Perhaps Delhi and even Kolkata does not have a clue on how the border town of Naxalbari looks like and that the government establishments still function out of temporary structures built four decades ago. This surely does not befit the image of a global superpower. The Sashastra Seema Bal (SSB) security folks on duty look suspiciously at every passing person and behave in a manner that makes one regret on taking the route. Globally, borders are seen as a gateway to trade and commerce. Between Nepal and India, it is treated as a regulated outlet that has been bestowed upon as a facility to Nepal. Similarly, rent-seeking is rampant on the Nepal side of the border. Authorities allow goods are allowed to pass either by accepting bribes or by being on the payroll of touts who have mastered border trade.

For example, handicraft items manufactured in Nepal — one of its main items of exports — cannot be exported through the Kakarvitta border as the Indian side does not have the required framework to let it pass. The Nepal side has also allegedly remained quiet about the issue to allow informal trade. A huge market in Northeast India and Bhutan for handmade crafts, therefore, cannot be accessed. Neither Delhi nor Kathmandu seem to have understood the nuances of border commerce. Meanwhile in East Africa, integrated customs points that are open round the clock have increased bilateral trade volumes. The Association of South East Asian Nations have a similar arrangement in place. On the contrary, Nepal and India like to close their border for many hours so that informal trade, which does not contribute to the state coffers, benefits those who been able to establish connections with the right people at the right time.

Politics and economics

The upcoming state elections in Bihar has been seen as a key event that has influenced the actions of the Indian government. In West Bengal, keeping the upcoming state election in 2016 in view, the incumbent chief minister is busy providing tribal status to various ethnic groups including the Gurkhas to secure their loyalty. These elections provide platforms to trade allegiance for favours, be it reservations in government jobs or state doles disguised under various welfare schemes. Welfare programmes keep people from building a society based on merit and reduce the hunger for entrepreneurship. Nepal’s current constitutional crisis also needs to be viewed from the perspective of the larger geopolitical impact it will have on different parts of India. A knee-jerk reaction from any segment of the polarised society will have impact on the people of Nepali origin in India too. Therefore, the current impasse demands a regional view of things.

Meanwhile, regional economic blocs like Bangladesh, Bhutan, India and Nepal (BBIN) continue to hold their meetings in various capital cities without the knowledge of how things are being implemented on the ground. Indian licence plate vehicles are not able to pick passengers at Nepal airports while vehicles with Nepali licence plates still face problems in obtaining permits to enter into India. Currently, Bhutanese apples cannot find a market in nearby eastern Nepal as no framework for formal trade exists even as the apples travel to far off parts of India making the middlemen rich at the cost of producers in Bhutan.

Road ahead

Border economies are the backbone of bilateral relationships and the livelihoods of millions of people depend on them.

The relationship between India and Nepal is based on historical grounds of mistrust and perception of inequity. Perhaps, it is now time to review the relationship in entirety and explore the possible working modality for the next 50 years. As both the countries depend on remittances their citizens earn in each other’s country, this must be taken into consideration. And most importantly, the next rounds of meetings of regional groups should be held in border towns and not the state or provincial capitals. It is important to understand the landscape of the border towns and the people who live there.

—By arrangement with The Kathmandu Post

Published in Dawn September 30th, 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play