The External Affairs Minister's January 4-5 Kathmandu visit may be described as a trend-setting act of diplomacy in the region
The just-concluded Nepal visit by EAM S Jaishankar has brought into focus the growing willingness of the two nations to set aside age-old contentious issues and explore new frontiers of economic growth and cooperation.

The first time Kathmandu and New Delhi gave hints about such a change of attitude was when Nepal's Prime Minister Pushpa Kamal Dahal, more popular as Prachanda, visited India for four days from May 31 last year.
 
The Maoist leader, who took over Nepal's reins for the third time in December 2022, then concentrated mainly on economic cooperation between the two countries. Risking adverse reactions back home, he refrained from raising sensitive issues such as the impact of the Agniveer project in Nepal, border disputes and the 1950 India-Nepal Treaty of Peace and Friendship, which, most of the people in his country say, is loaded in favour of New Delhi.
 
Game changer
 
The current mood in Nepal indicates a possibility of Jaishankar's two-day visit further strengthening the new development-centric approach in Nepal-India diplomacy in the coming days. Some of the key reasons for this are: 
 
First, the visit was as a follow-up to India's Neighbourhood First policy that regards Nepal as a priority. The choice of Kathmandu as Jaishankar's first international port of call in the New Year is seen as a proof of this. 
 
Second, New Delhi initiated steps to help Nepal enhance its revenue from power generation and sale in a big way. India will buy 10,000 MW of electricity from Nepal over a period of 10 years. At the moment, it imports about 50 MW of power from the mostly mountainous country.
 
Third, India agreed to assist Nepal in getting mutually beneficial investments in hydropower generation and transmission sectors. Bangladesh is another country that wants to import power from Nepal, which has the potential of generating over 42,000 MW. Currently, Nepal produces about 3,000 MW. 
 
Fourth, New Delhi committed its support to the landlocked nation's renewable energy development programme. 
 
Fifth, India decided to raise assistance for high impact community development projects (HICDP) to Nepali Rs 20 crore from the current Nepali Rs 5 crore.
 
Correct timing
 
Another important factor is the timing of Jaishankar's visit. It took place amid a serious financial crisis in Nepal. Inflation, poor revenue generation, unemployment, ever-rising migration of young job-seekers to foreign shores and poor revenue generation have sharply increased resentment against the country's elected government. Financial reports prepared by Nepali and international agencies put Nepal's GDP rate for the financial year 2023 at 1.9 per cent. 
 
The fall in the former Hindu kingdom's economy has been quite rapid and sharp since the outbreak of the pandemic four years ago. Political instability has aggravated the situation further. In the last 15 years, Nepal has seen a change of government 13 times. 
 
In recent months, anger and frustration have driven people to street demonstrations that sometimes end up in violence. The number of people supporting the restoration of kingship in Nepal has grown significantly. Adding to the elected government's embarrassment, former monarch Gyanendra has lately begun to publicly express his views on the “present state of affairs” in the country. 
 
Rays of optimism
 
All this, along with India's rapid and high economic growth, seems to have made most Nepalis rethink their views on India-Nepal relations. Many of them say their country cannot make its presence felt anywhere without economic development. Nepal imports almost every item of daily use, mainly from India and other countries. 
 
The change in Nepali thinking was evident both during and after Jaishankar's visit. He was in the Nepali capital primarily to attend the 7th meeting of the India-Nepal Joint Commission, set up in 1987 to review works related to bilateral cooperation. 
 
Jaishankar's Nepali counterpart is Narayan Prasad Saud of the Nepali Congress, a party perceived to be close to New Delhi. 
 
To build a consensus on bilateral cooperation, Jaishankar met representatives from across party lines and top leaders such as Nepal's president Ram Chandra Poudel, a Nepali Congress stalwart, and Prime Minister Dahal.
 
What seems to have specially influenced most of these leaders was India's decision to help Nepal develop power generation. Sale of energy will help Nepal in significantly narrowing the huge trade deficit it has with its giant southern neighbour. Remittances from non-resident Nepalis and tourism have so far been the biggest pillars of Nepal's economy. 
 
As an aberration, though, former Prime Minister Kharga Prasad Sharma Oli's Communist Party of Nepal-Unified Marxist Leninist (CPN-UML) and a few other groups have asked for a clarification on the four-fold rise in assistance for high impact community development projects (HICDP) projects. They fear that any direct investment of these funds by India may go against Nepal's interests. 
 
In reply, the coalition government said the agreement was signed in accordance with the modalities finalised in 2019 (when the CPN-UML and the Maoists were together in power as one single party named Communist Party of Nepal).  
 
Friends for ever
 
A few more developments, which may boost India's goodwill further, include New Delhi's decision to help Nepali scientists launch Munal, a satellite made by the Nepal Academy of Science and Technology. Jaishankar met members of Nepal's national cricket team and the Cricket Association of Nepal. Reports say India is likely to help Nepal build a cricket stadium. In recent years, Nepal has made remarkable progress in international cricket. 
 
One event that once again reminded everyone of the deep bond between the two nations was Jaishankar's visit to the Temple of Pashupatinath, Nepal's guardian deity. Apart from praying for the well-being of the peoples of the two countries, he planted a rudraksha tree on the temple premises. 
 
Can any two nations destined to live together by nature and tradition so closely ever go separate for long in times of need? 
 
*** The author is an ex-editor of The Times of India, who writes on diplomatic/SAARC affairs, Nepal, Bhutan, and China-Tibet issues; views expressed here are his own