This will be Prachanda’s first international visit since taking office for the third time on December 26. The two countries had held a preliminary discussion on Prachanda’s India visit when Indian Foreign Secretary Vinay Mohan Kwatre visited Nepal in February this year. During his visit, Prachanda will meet with India’s Prime Minister Narendra Modi and is expected to sign a number of infrastructure agreements as well as agreements on hydropower, commerce and wheat importation. One of the key focuses of discussions will be the construction of the Raxaul-Kathmandu railway.
Closer cooperation and coordination with India is crucial to Nepal amid recent political instability and economic downturn in the country due to inflation, import restrictions and austere monetary policies. Despite a rise in tourism amid loosened COVID-19 policies and slight increases in remittances, economic growth and consumption are still limited in the country.
Greater cooperation with India may contribute to energy cooperation and the power transfers from Nepal to India that may inject much-needed revenues into the Nepali economy. Improved transportation infrastructure like the Raxaul-Kathmandu railway and other rail lines will improve connectivity and encourage economic flows between the two countries in the medium-term.
