In what seems to be a triumph of pragmatism in Indian foreign policy and extension of India’s ‘Neighbourhood First’ policy, the Motihari-Amlekhgunj oil pipeline project was inaugurated by Prime Minister Narendra Modi and his Nepalese counterpart K.P. Sharma Oli on September 10, 2019. The 69-km pipeline, the first cross-border petroleum products pipeline in South Asia, will transport fuel from Barauni in Bihar to Amlekhgunj in Nepal. Celebrating the occasion, PM Modi said, “This is a matter of satisfaction that South Asia’s first cross-border petroleum pipeline has been completed in record time. This has been completed in about half of the expected time.”
Few interesting and striking aspects of the pipeline needs to be highlighted in the beginning: firstly, the completion of the project 15 months ahead of schedule can be seen as an important accomplishment of the Modi government, given the long-drawn criticisms of ‘tardy progress’ and ‘implementation delays’ of the project. Secondly, the inauguration of the pipeline through video-conferencing, despite the close proximity between the two countries, is symbolic of technological inter-connectivity. Thirdly, and most importantly, the pipeline marked a new beginning in an otherwise strained relations between the two countries.
Strategic and Economic Stakes of the Pipeline
The completion of the project is to a large extent going to provide India both strategic and economic leverage in the region. Proposed in 1996, the Motihari-Amlekhgunj oil pipeline project received a new impetus during Prime Minister Narendra Modi’s visit to Kathmandu in 2014. Keeping up the spirit of cooperation, in August 2015, the two governments signed an agreement to expedite the execution of the project. With an investment of over ₹324 crore ($ 45 million), the construction of the pipeline was undertaken by Indian Oil Corporation Limited (IOCL), India’s largest refiner, in collaboration with Nepal Oil Corporation Limited (NOCL) in April 2018.
With an annual capacity of 2 million metric tonnes, the pipeline is going to act as a new energy lifeline not only for Nepal but also for South Asian region to build onto the capillary networks of energy security. It will also prevent pilferage and adulteration while assuring uninterrupted supply during any blockade or stir on the borders. India is already supplying diesel to Bangladesh through cross-border train and plans to construct a petroleum pipeline connecting Siliguri in India and Parbatipur in Bangladesh. At present, India supplies about 1.3 million tonnes of petro-products per annum to Nepal, which is expected to increase in the coming years. The new Indo-Nepal Oil Pipeline can thus facilitate unfettered oil supply to the land-locked Himalayan Kingdom and in the process reduce retail oil prices in Nepal by Rs. 2, and concomitantly enhance overall regional connectivity and energy security.
Increasing Footprints in the Himalayan Kingdom
The project can also be perceived as part of New Delhi’s efforts to increase its presence in the Himalayan kingdom to minimise Chinese footprints. Noteworthy, India has been, for a long time, one of the most important development partners for Nepal. Continuing with its development assistance, India has been involved in the development of border infrastructure through upgradation of 10 roads in the Terai area in Nepal. These projects include development of cross-border rail links at Jogbani-Biratnagar, Jaynagar-Bardibas; and establishment of Integrated Check Posts at Birgunj, Biratnagar, Bhairahawa, and Nepalgunj. Additionally, India has been assisting Nepal in the power sector. Unfortunately, slow pace of project implementation and cost over-runs have plagued most of the developmental projects in Indo-Nepal relationship. As a result, and alternatively, Nepal has become a part of the China’s Belt and Road Initiative (BRI). Notably, India does not support the BRI project on grounds of encroachment of sovereignty, particularly the China-Pakistan Economic Corridor (CPEC) passing through Pakistan Occupied Kashmir (PoK).
Despite the on and off hiccups in Indo-Nepal relations, PM Modi has been persistently striving for cordial relations with Nepal. In the light of increasing Chinese inroads to the landlocked country, the inauguration of the pipeline has ‘Modi’-fied Indo-Nepal strategic and economic relations. The effective delivery of the committed projects – the establishment of the Raxaul-Birgunj Integrated Check Posts in 2018; the completion of first high-capacity Muzaffarpur (India) - Dhalkebar (Nepal) cross-border power transmission line (initially charged at 132 kV) and two additional 132 kV cross-border transmission lines between Kataiya (India) - Kusaha (Nepal) and Raxaul (India) - Parwanipur (Nepal) in 2016 and 2017 respectively; and more recently, the Oil Pipeline – has paved the way for the effective implementation of other projects. For instance, the Integrated Check-Post (ICP) at Jogbani (Bihar)-Biratnagar border gate with Nepal is near completion.
India-Nepal relations exhibit potential to emerge as leading economic hub in the region and by creating an enabling environment of mutual trust for peace and security of the region, they will further be able to unleash the collective creative energies essential for economic progress. The pipeline will, thus, go down in the history as an embodiment of mastery over art of implementation and a display of remarkable ingenuity of PM Modi to circumvent Chinese presence in Nepal and re-kindle Indo-Nepal relations. With just one stroke, PM Modi not only re-aligned Indo-Nepal relationship, providing a concrete alternative to China’s Belt and Road Initiative, but also provided a blueprint for inclusive development of the region.
(Dr. Mukesh Kumar Srivastava is working at the Indian Council of Social Science Research, New Delhi, India and Dr. Rajeev Kumar teaches at NCWEB, University of Delhi, New Delhi)