Review of 1950 treaty, trade on focus in Nepal FM's India trip

Issues of alleged border encroachment and cooperation on hydropower sector will also figure during her talks with top Indian leaders, including Prime Minister Mamohan Singh and her counterpart S M Krishna, she said.

"The focus of the visit will be on enhancing trade relations and increasing Indian investment," the minister, who will leave tomorrow for New Delhi on a five-day visit, said.
She said that Nepal will continue to pursue its foreign policy based on "economic diplomacy" and try to get maximum benefit from emerging economies like India and China.

"India has played a vital role in Nepal's economic development and we hope to increase India's participation in our development endeavours," 54-year-old Koirala, the daughter of former prime minister Girija Prasad Koirala, said.

The review of the Nepal-India Peace and Friendship Treaty of 1950 will also figure during the talks, she said adding, India also wants to have a relook into the 59-year-old pact. The Maoists have long demanding the review of the treaty which relates to various aspects of the bilateral ties.

The issue of alleged border encroachment by India will also be taken up as the matter surfaced during the session of Nepalese Parliament, Koirala said. "We should settle these issues as these will give a chance to those fomenting anti-India activities," she said.

The minister said issues pertaining to cross-border criminal activities, flood problems and implementing past agreements on hydro-electricity projects will also come up.

"We will discuss about criminal activities and terrorist activities being carried out by different armed groups in the open border as we need India's help for maintaining peace in southern Nepal," she said.

The rising criminal and terrorist activities along the border is an issue of mutual interest, she pointed out adding that "it is also India's interest to control such criminal activities on the open border."

"We are facing a big problem of security as we move forward in the peace process. India's support and cooperation will be crucial in improving security in the border and for the success of the peace process," she said.

To a question, she said there is no plan to sign an extradition treaty with India during the visit.

Turning to economic and trade ties, she said Nepal will ask India "to reduce tariff and non-tariff barriers so that we can reduce the increasing trade deficit and uplift our economy as we are passing through a political transition." At present, the trade deficit stands at USD 13.82 million.

Nepal government is aware of the labour problems and lack of security being faced by Indian joint ventures here, the minister said. "We have already moved a bill to establish a separate Industrial Security Force. We are committed to creating an investment-friendly environment."

Several Indian joint ventures here, including Dabur Nepal and Surya Nepal, recently faced labour unrest and Maoist- backed trade unions also forced brief shutdowns in some units.

Nepal government is considering a legislation so that industrial corridors can be declared as strike-free zones, she said. "One of the objectives of my visit to India will be trying to increase the confidence of the business community there so that they can make more investment in Nepal".

Infrastructure, tourism and information technology are some areas in which Indian investments could be helpful, she said. Koirala said Nepal government is considering a plan to declare Birgunj, the southern Nepal town bordering Raxaul of India, as a Special Economic Zone and wants to provide many facilities to the region for which India's help was needed.

Nepal wants to expedite construction of India-sponsored 240 MW Naumure Hydropower Project, Koirala said adding, it will also seek more scholarships for Nepalese students. Agriculture development, information technology, tourism development are some other areas which will be discussed under the future cooperation projects between Nepal and India, she added.