India’s regional connectivity initiatives in the energy sector have acquired a new impetus under the leadership of Prime Minister Narendra Modi. Mr. Modi has made a strong pitch for ‘neighbourhood first’ policy. This reflected during the recently concluded 4th BIMSTEC Summit meeting held in Kathmandu in August 2018. In close proximity to the Indian Prime Minister’s Kathmandu visit, Indian Minister for Petroleum and Natural Gas and Skill Development and Entrepreneurship, Mr. Dharmendra Pradhan visited Nepal to fast track and give a concrete shape to a few important bilateral projects.
Mr. Pradhan, during his meetings with the top brass of the Nepalese establishment, including the Nepalese President fondly recalled the well-knit historical ties and the cordial relations that both countries share. He reiterated India’s resolve to maintain the momentum of bilateral cooperation and deepen the multifaceted relationship. He also carried a reassuring message of India’s strong commitment to, and continued support for, the development of Nepal.
One of the most significant outcomes of the Indian Minister’s visit was review of the entire gamut of energy sector cooperation with the Nepalese Minister of Industry, Commerce and Supplies Mr. Matrika Prasad Yadav. The meeting evaluated the progress of the 69-kilometer-long Motihari-Amlekhganj oil pipeline project intended to ensure the smooth and seamless flow of petroleum products to Nepal. The pipeline, once commissioned, shall drastically reduce logistics and environmental costs resulting in an estimated annual savings of around Rs. 2 billion for Nepal. A MoU for construction of this pipeline had been signed during the previous visit of Mr. Pradhan to Kathmandu in April 2015.
In a noteworthy gesture of friendship, Prime Minister Modi had committed to commission this pipeline project during his first visit to Nepal as India’s Prime Minister in 2014. India has a lion’s share of investment in the transnational pipeline project- the first of its kind in South Asia. During the August 2017 meeting, both Prime Ministers had welcomed the decision to set up a Joint Working Group (JWG) on cooperation in the oil and gas sectors, which would oversee the construction of this pipeline including considering its extension to Chitwan. Mr. Pradhan and Mr. Yadav noted with satisfaction the progress of the pipeline construction and reviewed the project on ground at Amlekhgunj. On completion of this project, the Indian border town of Raxaul shall undergo a metamorphosis, acting as a pumping station for pipeline supply rather than a border crossing point for a long queue of oil tankers. The Indian Minister for Petroleum & Natural Gas assured Kathmandu that, New Delhi would positively explore possibilities of laying LPG and natural gas pipelines on this route to Nepal. He also pledged India’s support for skilling and capacity building in Nepal by extending assistance to set up a Skill Training School in Dhanushdham.
India has quite literally stepped up on the gas, insofar as energy diplomacy with countries on its eastern flank is concerned. A few days before embarking on his Nepal trip, India and Bangladesh inaugurated the construction of the Siliguri-Parbatipur pipeline and immediately upon his return to India; Mr. Pradhan met his Myanmar counterpart to enhance bilateral cooperation in the oil and gas sectors. India’s Hydrocarbon Vision 2030 envisages a roadmap for dense regional energy interdependence by exploring energy linkages and trade opportunities in countries like Nepal, Bangladesh, Bhutan and Myanmar. Countries like Myanmar and Nepal have evinced deep interest to learn from, and replicate India’s signature ‘Ujjwala’ scheme, intended to safeguard the health of women and children by providing them with a clean cooking fuel.
India’s energy diplomatic outreach initiatives, apart from envisaging intense cooperation in the oil and gas sectors, also subsumes regional hydro-electric cooperation and solar alliances to attain Prime Minister Modi’s vision of a strong and self-reliant India on the global stage. The days of transnational pipelines and grid connectivity in South Asia are not too far off.
Script: Satyajit Mohanty, Irs, Senior Economic & Energy Analyst