Recent times have seen a change in the relations between India and Nepal for a number of reasons. Talk about. What steps can India take to make its relationship with Nepal stronger?(Answer in 150 words)
Answer: The office of the United States Trade Representative (USTR) maintains a list of countries that it classifies as developing, developed and least-developed. Countries that are classified as developing are allowed to export certain goods to the US without punitive tariffs that are usually imposRead more
Answer: The office of the United States Trade Representative (USTR) maintains a list of countries that it classifies as developing, developed and least-developed. Countries that are classified as developing are allowed to export certain goods to the US without punitive tariffs that are usually imposed on goods from developed countries. The ‘developing country status’ owes its origin to the US Trade Act of 1974, which authorized the Generalized System of Preferences (GSP) to help poor countries develop faster. These benefits were extended further under the WTO wherein rich countries agreed to grant trade benefits to countries that classified themselves as poor. About two-thirds of countries that are members of the WTO classify themselves as developing countries and avail benefits. Recently, the US removed more than a dozen countries including India, from its list of developing countries. The US administration has repeatedly accused fast growing economies like India and China of wrongly claiming trade benefits and wants to make these deals fairer to the interests of the US. Implications of this action are as follows:
- Higher tariffs: India has been one of the largest beneficiaries under the GSP with tariff exemptions amounting to $260 million in 2018. Now the Indian goods will have to face higher tariffs as compared to other developing countries which will negatively impact the exports of goods to the US and will hamper India’s export potential.
- Loss of exemptions: India was eligible for the 2 percent de-minimis standard under WTO rules, which exempted India from countervailing duty (CVD) investigation. Duty investigations for India will now be conducted. It would be easier for the US to penalize the country if it harms US industries with unfairly subsidized exports.
- Access to global market: Many other developed nations give India the GSP which might also be under consideration that would impact India’s market access globally and decrease its export competitiveness.
- Impact on agriculture: Due to WTO, India gets more subsidies than developed countries, and this includes agricultural subsidies. If it is designated as a developed country, these subsidies will be halved, if not more. It will have serious implications on agriculture and the farming community.
India is a unique economy wherein, a small part of the country seems like a developed country, but a large part of the nation is less developed or even under-developed. At the current stage of development, any attack on India’s status as a developing country will have a serious impact on its overall development. India needs to rebalance things and bring the USA on the negotiation table to turn things in its favour.
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Indo-Nepal relations have experienced significant changes recently due to a variety of factors. Historical ties, geographic proximity, and cultural connections have traditionally anchored their relationship. However, recent geopolitical dynamics, economic issues, and domestic political changes haveRead more
Indo-Nepal relations have experienced significant changes recently due to a variety of factors. Historical ties, geographic proximity, and cultural connections have traditionally anchored their relationship. However, recent geopolitical dynamics, economic issues, and domestic political changes have contributed to a shift.
Firstly, Nepal’s growing engagement with China has raised concerns in India. China’s increasing investments in Nepal, particularly in infrastructure projects under the Belt and Road Initiative, have led to a perception of reduced Indian influence in the region. Additionally, the 2015 border blockade, which Nepal accused India of imposing, caused significant resentment among Nepalis, affecting bilateral trust.
Secondly, territorial disputes, particularly over the Kalapani-Lipulekh-Limpiadhura area, have strained relations. Both countries claim this strategically important region, leading to nationalistic sentiments on both sides and diplomatic tensions.
Furthermore, Nepal’s internal political instability and shifts in leadership have influenced its foreign policy orientation. Different political factions in Nepal have varying approaches to India, impacting the consistency of bilateral relations.
To strengthen its relationship with Nepal, India can take several measures. Firstly, enhancing economic cooperation through increased trade, investment, and development assistance can foster mutual growth. India should prioritize infrastructure projects that benefit both nations, such as cross-border rail links and energy cooperation.
Secondly, resolving territorial disputes through diplomatic dialogue and confidence-building measures is crucial. Establishing joint mechanisms to address border issues can reduce tensions and build trust.
Thirdly, India should respect Nepal’s sovereignty and avoid perceptions of interference in its internal affairs. Supporting Nepal’s democratic institutions and engaging with all political factions can help maintain a stable and friendly relationship.
Lastly, people-to-people ties can be strengthened through cultural exchanges, tourism, and educational partnerships. Promoting shared heritage and cultural linkages can reinforce the historical bonds between the two nations.
By addressing these factors, India can foster a more robust and positive relationship with Nepal, ensuring regional stability and cooperation.
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