Maoist hawks ask Nepal PM to scrap trade pact with India

October 24th, 2011 - 4:05 pm ICT by IANS  

Kathmandu, Oct 24 (IANS) The new trade pact inked by Nepal’s Maoist Prime Minister Baburam Bhattarai during his just-concluded visit to India has come under fire with the hawks in his own party demanding that it be scrapped or approved by parliament.

Bhattarai, who said he took a calculated risk by wrapping up a Bilateral Investment Promotion and Protection Agreement (BIPPA) during his maiden official visit to New Delhi last week, faces fireworks in parliament Monday when the opposition as well as the hawks from his own party will grill him on the pact.

The first rumblings came Sunday when Bhattarai, returning to Kathmandu on the conclusion of the four-day visit, was greeted with black flags at the airport by cadres loyal to a deputy chief of the Maoist party, Mohan Baidya, who slammed it as “anti-national” and a “sell-out” to India.

Maoist MP and former minister Dev Gurung, who belongs to the Baidya faction, Monday called for the pact to be scrapped, amended or endorsed by parliament.

Gurung said the agreement had been signed in defiance of the party’s advice to Bhattarai before he left for New Delhi.

“The standing committee of the party had asked the PM not to sign any agreement of prolonged national importance,” he said.

According to the Baidya faction, who have been urging a war on India, the investment agreement is harmful for Nepal’s remittance-propped floundering economy because it promises to pay compensation to Indian investors should they suffer a loss due to armed insurrection, war, the declaration of emergency or an outbreak of civil unrest.

“With 60 per cent of Nepal’s trade being with India, the government is in no shape to pay compensation to the large number of Indian investors,” Gurung said.

The hawks also allege the agreement would give undue advantage to Indian investors and impact domestic traders negatively.

Gurung said it would also seek to bypass Nepal’s courts of law, who are the arbitrators currently during trade disputes, as well as parliament, whose approval was not sought for the pact.

The Maoist war cry has been taken up by the opposition, especially the communists, the Maoists’ former allies.

Former communist prime minister Jhala Nath Khanal, who was replaced by Bhattarai, has warned his party would start a protest movement against the agreement.

Even the Nepali Congress, the largest opposition party traditionally regarded as being close to India, said the compensation issue was a debatable one since most of the unrest affecting industries was caused by the Maoist trade unions.

However, Bhattarai’s financial advisor and former finance secretary Rameshwor Khanal said there was nothing objectionable in the new agreement.

“Nepal already has similar bilateral agreements with the US, Germany and Finland,” he said. “The new agreement with India has a life of 10 years only. After that, if both sides desire, it can be renewed or scrapped.”

Khanal also pointed out that the pact is yet to come into force and would do so only after diplomatic notes between Nepal and India were concluded.

“India signed BIPPA with several countries years ago but they are yet to be ratified,” he said. “The mere signing of the agreement in New Delhi doesn’t mean it has come into effect immediately.”

Khanal also said that if Nepal’s laws required the agreement to be endorsed by parliament, it would be tabled in the house.

The advisor pointed out that merely inking a pact did not bring fresh investment.

“It’s the business environment and opportunities to make a profit that bring in investors,” he said. “Nepal signed a BIPPA with Mauritius but so far not a penny of investment has flowed in. The agreement on paper is just a confidence-building measure.”

(Sudeshna Sarkar can be contacted at

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