Nepal India Forge Closer Ties

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Sept. 18 – Earlier this week, India and her neighbor to the north Nepal agreed to review a decades-old pact governing bilateral relations that has been a source of friction between the South Asian neighbours for a few years now. Prachanda, the present prime minister who led the Maoist insurgency before embracing multi-party democracy led the country's first demecratic delecgation to India. Prachanda as prime minister, held talks with his counterpart Manmohan Singh on Monday, AFP reported.

Known as the 1950 Indo-Nepal treaty of Peace and Friendship, it binds the two countries in a close strategic partnership and forms the basis of security and trade links, allowing landlocked Nepal access to Indian ports for commerce.

Both sides were unwilling to comment on which portions of the the 22-point, 1950 treaty they would revise. “India and Nepal have changed. It is necessary to look and update, build and improve what we have,” said Indian foreign secretary Shiv Shankar Menon in response to questions.

As per the agreement, Xinhua reported that the Indian government will provide a credit of up to 1.5 billion rupees, or 30 million U.S. dollars, to the Nepal government for the next three months to ensure uninterrupted supplies of petroleum products.

The government of India will also lift bans on the export of rice, wheat, maize, sugar and sucrose for quantities agreed with Nepal.

During the talks, Singh said New Delhi would give Nepal 200 million Indian rupees (four million dollars) as flood relief assistance.

Large parts of Nepal and India's adjoining Bihar state have been submerged after the river Kosi which originates in the Himalayan state broke through its embankments.

Both sides also decided to set up a panel to review water resources management, including flood relief, Menon said.