Modi announces $1-bn loan to Nepal; offers to review bilateral treaty

India has extended a line credit of $1 billion (Rs60,000 crore) to Nepal even as visiting Indian Prime Minister Narendra Modi said he would do everything in his power to expedite Nepal's progress.

Modi also made it clear that he was ready to consider suggestions if any to review the 1950 India-Nepal Friendship Treaty that governs the relationship between the two countries.

Addressing the constituent assembly of Nepal, the Indian prime minister extended full support to Nepal to build highways, infoways and transways. India would also help develop the tourism potential of Nepal, both as a spiritual, and adventure tourism destination, he said (See: Committed to Nepal's development, Modi tells Nepal PM).

Modi also offered to lay pipelines to help transport oil to Nepal, increase the number of scholarships to students from Nepal and help Nepal emerge as a major exporter of herbal medicines.

Stating that the sooner Nepal comes close to us, the better, the prime minister urged that the bridge on the Mahakali river and the Pancheshwar multi-purpose project should be taken up at the earliest.

Noting that it is more expensive to make a telephone call between India and Nepal, than it is to make a call between India and USA, the prime minister said he is keen to change this state of affairs.

The India-Nepal border should not be a barrier but a bridge which helps bring prosperity to both sides, the prime minister said.

Stressing the need for prioritising infrastructure in the pace of development, Narendra Modi said, more importantly, the bridge of trust between the two nations should be strengthened.

The PM also said that together, the SAARC countries should come together and fight poverty, in addition to helping each other in the same cause.

He offered assistance to Nepal in the fields of organic farming, and soil health.

During talks with his Nepalese counterpart Sushil Koirala and delegation-level talks between the two sides, Narendra Modi highlighted that the biggest focus of the two nations should be development. "Sabka saath, sabka vikaas" is relevant for India's neighbours too, he asserted.

Modi pledged to end Nepal's crippling blackouts by helping the country set up hydropower plants and offered to buy surplus electricity from the country.

"Nepal can free India of its darkness with its electricity," said Modi, the first Indian prime minister to visit the neighbouring nation in 17 years. He also sought to allay Nepalese fears that India was attempting to monopolise water resources of the Himalayan nation.

"We don't want it free. We want to buy power. We don't even want to take your water...India wants to walk shoulder to shoulder with you. You take the decisions. By just selling power, you can become a developed nation," Modi said.

"I want to double the amount of electricity India is providing Nepal today so we have to lay the transmission lines as soon as possible," the prime minister said.

The two sides have also agreed to take decision regarding Nepal India Power Trading Agreement within the next 45 days.

"My doors are open, I invite you to bring any suggestions to review the 1950 Treaty, if you so want," he said at a banquet hosted by Nepalese Prime Minister Sushil Koirala.

Modi's offer followed claims by some sections in that the provisions of the 1950 treaty are not in the interest of Nepal.

In fact, both sides have been reiterating their readiness to do so without any progress.

(Also see:  Former Nepalse minister backs trilateral cooperation, says Xinhua)