Defence procurement arrangements with Nepal have a crucial national security dimension. India’s concern is not earnings for its defence industry, as arms transfers to Nepal are on highly concessional terms. As Nepal occupies a vital space in India’s overall security, especially after China removed a centuries-old buffer by occupying and militarising Tibet, it is normal for India to expect even Maoist Nepal to be a friendly country that respects its legitimate concerns.

The deplorable inability of India and Nepal to realise large-scale joint multi-purpose hydro-electric projects is not going to be remedied with the Maoists in the driving seat. For Nepal to graduate from a foreign aid, remittance and tourism dependent economy, it would need to develop its water resources assets. Energy hungry India is a ready market. But this has, over the years, become a highly politicised issue, around which have coalesced all the India-related grievances and suspicions of Nepal. India’s growing economy and the vigour of its entrepreneurs could be leveraged by Nepal to its advantage, but such thinking is unlikely to sway the Maoists. Even before this can happen, the Maoists will need to reassure the country’s own business class about their future policies so that investment and economic activity in general do not slow down, making poverty alleviation in Nepal yet more difficult.

The first dramatic step has been taken by the Constituent Assembly on an issue that had been settled beforehand. Issues it has to deal with now are highly complex, whether that of power sharing, of federalism, of integrating Maoist cadres into the armed forces or disbanding the terrorising Maoist youth cadres, of the churned-up Terai, etc. Faced with difficulties, the temptation to fall back on old reflexes and blame India for the country’s problems will always be there. The Maoists will have India as a scapegoat for their own failure if they sacrifice pragmatism to ideology. In Nepal, the roles of the actors may have changed, with new a cast of heroes, but the script for India has not improved.

... contd.