New Delhi: As part of the National Democratic Alliance (NDA) government’s neighbourhood-first foreign policy, Prime Minister Narendra Modi and Nepal’s premier K.P. Sharma Oli on Saturday remotely attended the ground breaking ceremony of South Asia’s first transnational petroleum pipeline, that will supply fuel to India’s land locked neighbour.

The 69 km pipeline from Motihari in Bihar to Amlekhganj in Nepal will deliver 2 million tonnes per annum (MTPA) of petroleum products to the fuel starved country and will be built at a cost of around Rs200 crore.

Historically, India has played a very important role in Nepal’s development, said Modi at the joint press conference here.

This comes in the backdrop of the fuel supplies from India temporarily being disrupted in 2015 when protestors blocked the main transit point on the border. Nepal also signed a fuel purchase deal with China, but the route between the nations presents logistic challenges.

PM Modi had in 2014 said in an address to the Nepal parliament that India would build the petroleum product pipeline during his visit to Nepal. The project is being implemented by state run Indian Oil Corporation (IOC) and Nepal Oil Corporation and will supply petrol, diesel and kerosene. India has been supplying fuel to Nepal since 1974 under contracts that were periodically renewed.

While the two neighbours have been underlining their special relationship, of late these ties have been fraying on account of Nepal cultivating links with China to balance those with India.

Oli is on his first trip abroad after taking over as prime minister in February at the head of a leftist coalition government. He is slated to visit China post his India trip. Soon after his India visit in 2016, Oli was in China looking for fuel exports to offset the shortfall of energy supplies from India.

“During this transitional juncture, we need support and cooperation from our friends," said Oli.

This is Oli’s second visit to India as prime minister since 2016. Ties with India were prickly as there was a perception in Nepal that India was backing protests against the new constitution by the discontented 51% of the population—the Tharus, Janjatis and Madhesis—who were blocking key access roads from India to Nepal, used for transporting essentials such as fuel and medicines to the landlocked country.

India has also been supplying electricity to Nepal with the eight-member South Asian Association for Regional Cooperation (Saarc) signing a framework agreement on electricity trade at its Kathmandu summit in November 2014.

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