Home / Politics / News /  Cross-border oil pipeline to boost India, Nepal relations

NEW DELHI : India and Nepal on Tuesday inaugurated a cross-border oil pipeline, which will transport fuel to the landlocked country. The move seeks to bind Kathmandu closer to New Delhi, economically and strategically.

The 69km pipeline will transport fuel from the Barauni refinery in Bihar to Amlekhgunj in south-east Nepal and is the first cross-border petroleum products pipeline in South Asia. It was inaugurated by Prime Minister Narendra Modi along with Nepal prime minister K.P. Sharma Oli via video conferencing.

The aim is to cement India-Nepal ties in the face of major inroads made by China into the Himalayan nation, and seeks to repair the trust deficit between the two countries due to an economic blockade seemingly imposed by India in 2015 to persuade Nepal to change some provisions in its new constitution.

“This is a very, very important development. The pipeline connects India seamlessly to Nepal underlining the fact that geography favours India-Nepal relations naturally" vis a vis China, said Shiv Mukherji, a former Indian ambassador to Nepal.

The development comes against the backdrop of recent plans for a rail link between Nepal and China cutting through the Himalayas. There were also plans to link Nepal and China through an energy pipeline running through the Himalayas. Both were seen as means by Nepal to find an alternative to its dependency on India and came on the back of tensions in 2015. India said that trucks laden with fuel and medicines, besides other essentials, were stopped by sections of Nepalese population unhappy with some provisions of their constitution. Nepal, however, viewed it as India blocking the supplies to compel Kathmandu to amend the provisions of the constitution that was seen as disenfranchizing almost half of the Nepalese population.

According to Mukherji, “the impassibility of the Himalayas is a thing of the past" and rail and pipelines through the Himalayas could be accomplished by unlimited resources. “But the India-Nepal pipeline serves to bind the people of the two countries and adds credibility to the argument that India is a development partner of Nepal." He added that it will also boost mutual trust and confidence between the two countries.

The Motihari-Amlekhgunj oil pipeline project was first proposed in 1996. The project was put back on the agenda during Prime Minister Narendra Modi’s visit to Kathmandu in 2014. The two governments had signed an agreement to execute the project in August 2015. Construction had begun in April 2018. Construction of the pipeline was undertaken by Indian Oil Corp. Ltd (IOCL), India’s largest refiner, with an investment of over 324 crore, in collaboration with Nepal Oil Corp. Ltd (NOCL).

The two sides are also working on building additional storage facility at the Amlekhgunj Depot, wherein NOCL has committed an estimated 75 crore. The pipeline can carry up to 2 million metric tonnes of petroleum products each year. Currently, petroleum products are carried from India to Nepal using oil tankers as part of an arrangement which has been in place since 1973. The NOCL hopes to save 200 crore annually with the new pipeline.

Reiterating India’s commitment to Nepal’s development, Modi said the bilateral projects conceived by the two countries are progressing well and he hoped to jointly inaugurate them with his Nepal counterpart in the coming days. People to people ties were the foundation of the bilateral relationship, Modi said. “By reducing the price of fuel and transferring the benefits to consumers in Nepal, you have already conveyed to the people of Nepal that this pipeline is for their benefit," Modi said referring to a fuel price cut by the Nepalese government on Tuesday.

On his part, Oli hailed the pipeline as one of the best examples of “trade and transit cooperation". Nepal attached great importance to its ties with India and there was always scope for expanding this, he added.

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