india

Updated: Sep 11, 2019 00:48 IST

South Asia’s first cross-border oil pipeline, with an annual capacity of 2 million metric tonnes, was jointly inaugurated via video conference on Tuesday by India’s Prime Minister, Narendra Modi and his Nepalese counterpart, KP Sharma Oli.

The pipeline, which runs from Motihari in India’s Bihar to Amlekhgunj in Nepal, will replace tankers that carry petroleum products from India as part of an arrangement put in place in 1973. India, Nepal’s sole supplier of oil, funded the Rs. 324-crore project. Speaking on the occasion, Oli expressed appreciation for the early implementation of the important connectivity project, which was completed about 15 months ahead of schedule. “We have similar visions of development, prosperity and happiness of our peoples...”

Modi said the 69km pipeline will provide cleaner petroleum products at affordable prices to the people of Nepal. He welcomed Oli’s announcement on reducing the price of petroleum products in Nepal by Rs 2 per litre. Nepal Oil Corporation (NOC) hopes to save Rs 2 billion a year on the transportation of petroleum products by using the pipeline.

Modi noted that regular exchanges at the highest political levels of the two countries have helped create a forward-looking agenda for expanding the bilateral partnership. The PM also expressed confidence that ties between India and Nepal will continue to deepen and expand.

The pipeline is being perceived as part of India’s efforts to retain its influence in Nepal, where China has made inroads in recent years by funding infrastructure and connectivity projects. The implementation of India-funded projects in Nepal has gained momentum following talks between Modi and Oli last year.

Jayant Prasad, a former ambassador of India to Nepal, said: “The Amlekhgunj pipeline shows that India is committed to the energy security of Nepal. Not only this pipeline, since 2011, India has also invested in grid connectivity, which enables Nepal to draw the power it needs from India. The pipeline demonstrates also that projects in which both governments are interested can be speedily implemented.”

The pipeline is also significant for Nepal because nationalist sentiment in Kathmandu has often seen the country’s dependence on India for fuel as a source of leverage Delhi can deploy for political and diplomatic ends. In 2015, soon after the Constitution of Nepal was promulgated, protests had broken out in the southern plains of the country, bordering India. The protestors, who belonged to the Madhesi community in Nepal, blocked the entry points at the border, halting the supply of essential commodities, including fuel.

But the Nepali political establishment saw the protests as having the support of New Delhi. The pipeline is expected to allay Nepali apprehensions for it will prevent any obstruction to fuel supply, and reassure Kathmandu of India’s intent.

Bhaskar Gautam, chairperson of the North-South Collective, a Nepali research institute, said: “This is a significant step forward in the relationship. It will usher in predictability in fuel supply, and make it harder for disruptions of any kind to occur. This is the kind of bilateral cooperation which is a win-win for all sides.”