By Devendra Gautam

Backyard. Buffer state. Sandwiched. Poor. Dependent. 

These are some of the words that a Nepali often comes across while consuming Nepal-related contents coming from the neighbourly media down south. For several wonks and a significant section that seems to be getting increasingly hawkish with the ascendance of their country as the fourth mightiest military power (with the PwrIndx of 0.1023) and the fifth largest economy with a GDP of $3.89 trillion, smaller neighbours, Nepal in particular, are their ‘backyard’, a ‘buffer’ state ‘sandwiched’ between their country and China, ‘poor’ and ‘so dependent’ that they cannot make do on their own. All these neighbours need, therefore, is ‘annexing’, so goes the toxic and jingoistic narrative. 

Chest-thumping print, electronic and online media have only added pitch to this already shrill narrative even as a formidable centre struggles to prevent the descent of certain regions of that vast country into chaos while trying to deliver tangible results to around 1.4 billion people, including to around 26 crore people living below the poverty line. 

This does not mean that the world’s most populous country has not achieved miracles of sorts in recent decades. It has, and a massive reduction in multidimensional poverty is a shining example of this feat. 

According to the Multidimensional Poverty Index (MPI), published annually by the UN Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative, some 415 million Indians escaped poverty between 2005-06 and 2019-21 as the incidence of multidimensional poverty fell from 55.1 percent to 16.4 per cent.

And here is our state, unable to provide even for around 2.96 crore people, contributing significantly to a massive muscle and brain drain from the country to sweatshops and promised lands around the world. 

Our economy, worth $40.91 billion in 2023 and representing a paltry 0.04 percent of the global economy, has not been in the pink of health for decades. 

Data speak for themselves: Per Trading Economics, the GDP annual growth rate in Nepal averaged a measly 4.34 percent from 1993 until 2023, reaching an all-time high of 9 percent in 2016 and a record low of -2.4 percent in 2019. 

Also, an MPI value of 42.5 percent does not paint a very rosy picture in terms of poverty alleviation. In this context, whose poverty has the Poverty Alleviation Fund, among other state organs, been trying to alleviate over the decades is an open question with obvious answers. 

Let’s compare our situation with India’s. 

From 2006 to 2023, India’s average GDP growth averaged 6.15 per cent, with a high of 8.7 per cent in 2022 and a low of -6.6 per cent in 2021. The GDP growth from 2004 to 2014 averaged 6.7 percent—7.46 percent from 2009-2014 and 8.1 percent from 2004-2009—giving continuity to an average growth trajectory of 6-7 percent after the then government undertook broad economic liberalisation measures following a balance of payments crisis in that country in 1991. 

What’s more, there’s a huge imbalance in our trade with the world’s fifth largest economy, with the ‘export’ of unskilled human resources constituting a significant chunk of the ‘export volume’. 

Does our extremely competent government have any idea regarding the number of Nepali citizens working in India? By the way, Vijay Jolly, a leader of the ruling Bharatiya Janata Party, during a face-to-face at the Reporter’s Club on December 5, put the number of Nepali citizens working in India at a whopping 50 lakh (Hope yours truly has understood his Hindi correctly). Do these figures tally with government data on Nepali workers sweating it out in India?      

And what about the number of Indian people working in Nepal, in formal and informal sectors?    

Back to bilateral trade and commerce. India’s Ministry of External Affairs states in its website that India constitutes 64.1 percent of the total trade of Nepal, comprising about $8.85 billion in the Indian fiscal year 2022-23. The Embassy of Nepal in India states in its website (with considerable pride, perhaps) that India is Nepal’s largest trade partner. Per the embassy, the volume of bilateral trade reached over Rs 1134.53 billion (Re 1 = $0.0074) in the fiscal year 2022-23. A deeper study of this figure reveals what seems to be an unbridgeable gap in bilateral trade. During the period, cumulative imports from India crossed Rs 1027.84 billion even as exports from Nepal surpassed a paltry 106.69 billion mark. 

Per the embassy website, Nepal’s top export items in 2023 included palm oil, soybean oil, cardamom, woolen carpets, Iron and steel products and polyester yarn. Other traditional export items comprised jute products, leather goods, ginger, tea, ready-made garments, handicrafts, agro- and forest-based goods, and medicinal herbs.

Per the embassy, energy, drinking water, mushroom, saffron and floriculture products hold what it calls huge potential while vegetable seeds, orthodox and CTC tea, niger seeds, essential oils from medicinal and aromatic plants, leather goods, woolen goods, silver articles/jewellery and gold jewellery also have good prospects for export.

As for imports, the embassy concedes that imports to Nepal from India have increased substantially (over the years). It lists petroleum products, transport equipment and parts, electronics, machinery and parts, rice, crude soybean oil, medicine, telecommunication equipment and parts, readymade garments, fertilizer, and coal, etc as top imports.  

Notwithstanding the fact that petroleum products are one of the topmost imports bleeding the Nepali economy dry, the government is committed to extending South Asia’s first cross-border petroleum pipeline (the Motihari-Amlekhgunj pipeline) to Kathmandu via Lothar (Chitwan), building the Siliguri-Charali petroleum pipeline and increasing the petroleum storage capacity. This is, perhaps, part of our government’s roadmap to make the country rich in water resources and with considerable hydropower potential prosperous and a happy, always smiling people, happier. 

Leaving the grand project aside, the embassy does not list what is perhaps the most worrisome ‘import’—the unchecked inflow of people, including migrant workers from across the border and the restive neighbourhood, thanks to an open border with the world’s most populous country—for obvious reasons.  


Ironically, this unchecked inflow has only bolstered the narrative that seeks to portray Nepal as a hub of activities against the southern neighbour, severely undermining the role of Nepal as an employment destination for lakhs of people from the populous states of Uttar Pradesh (estimated population: 23.89 crore) and Bihar (around 12.9 crore), among others. 

The question is: if the open border does not serve both of our countries’ interests, why keep it open? 

Conscious readers will surely notice that yours truly has not talked about Nepal’s borders with the northern neighbour. This is because movement of people through the Nepal-China border is minimal, given the Himalayan wall that stands between the two countries. 

But the movement of peoples and goods through the border is likely to surge if certain connectivity projects see the light of the day. While increased connectivity tends to increase trade and commerce, it also accentuates security risks/threats, especially if an instability and corruption-plagued polity is at the helm.  

Yours truly believes that Nepal’s extremely competent political and bureaucratic leadership is well aware of this fact. Surprisingly, while reiterating its commitment to one-China policy during the prime ministerial visit to the northern neighbour and doing every bit to allay the northern neighbour’s concerns, our government leadership did not raise the long-pending Tibetan refugee issue and its impact on Nepal. 

Summing up, in the eyes of the world's most populous and second most populous nations, we may be the ‘backyard’ and the ‘frontyard’ but first and foremost, we are an independent and fully sovereign country. And all countries are equal in terms of sovereignty. 

The good ole’ Robert Frost writes: Good fences make good neighbours. As we open up to the possibilities of trade and commerce with two of the global economic powerhouses, we should move with extreme caution by taking into account our institutional capacity to draw benefits from these giants and by fortifying physical and virtual walls for safeguarding our core interests.