Nepal, India Discuss Flood Reconstruction and Ties Ahead of Balen Shah's Delhi Visit

Nepal's Finance Minister Swarnim Wagle met External Affairs Minister S. Jaishankar in Delhi on Friday, with post-flood reconstruction and a recalibration of India-Nepal relations topping the agenda as both sides prepare for a visit by Nepal Prime Minister Balen Shah later this year.

Jaishankar conveyed his deep condolences over the recent flash floods and said the two sides discussed ways to strengthen overall cooperation, particularly in the economic, energy and connectivity domains. He linked the engagement to the government's "Neighbourhood First" approach.

Wagle's trip to Delhi is his first visit abroad since taking office. It follows a June visit by Nepal's Foreign Minister Shishir Khanal, part of a push by ruling Rashtriya Swatantra Party (RSP) Chairman Rabi Lamichhane for a "reset" in ties between Delhi and Kathmandu, which have been strained in recent years over boundary disputes and economic issues.

Reconstruction needs

The meeting came a day after Wagle held talks with Finance Minister Nirmala Sitharaman, during which India committed to continuing support for Nepal's recovery from the floods. Officials said the full reconstruction bill after the August 26 floods, which left more than 1,400 dead and over 6,000 missing, will exceed $5 billion.

Nepal is expected to appeal for multilateral support at the UN General Assembly in New York next week, where Shah is due to deliver his first international speech. Wagle will later travel to Doha for a meeting of the China-led Asian Infrastructure Investment Bank's Board and to Bangkok for the IMF and World Bank meetings.

According to a Finance Ministry readout, Wagle thanked India for its assistance after the Trishuli river overflowed in areas on both sides of the Nepal-China border and destroyed a major Chinese border crossing at Rasuwa. The two sides also discussed strengthening bilateral economic ties and initiatives to improve connectivity for trade, investment and people-to-people exchanges.

Connectivity concerns

Nepal is keen to explore road and rail links, but officials said it wants to resolve the long-pending issue of overflight permissions for flights to Nepali airports. India's denial of permission for bi-directional flights to the Gautam Buddha International Airport at Bhairahawa near Lumbini and Pokhara International Airport has caused Nepal significant financial losses in debt repayments.

Officials described the Shah government as positive about engaging with New Delhi since coming to power in elections in March this year, despite earlier misgivings that led to the cancellation of Foreign Secretary Vikram Misri's visit to Kathmandu in May after it became clear the Nepali Prime Minister would not meet him. Ties have since picked up, helped by Lamichhane's June visit, during which he met Prime Minister Narendra Modi.

Wagle, an economist who previously served as an adviser at the UNDP and as a senior economist at the World Bank, and who ran a think tank on South Asian development policy in Kathmandu, is meeting academics and diplomats during his Delhi visit. On Saturday he is scheduled to meet a group of Indian industrialists working in Nepal to discuss their plans and concerns about future investment, and to address scholars at the Delhi School of Economics.