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Act East And More: Modi In Nepal For SAARC Summit

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Aiming to inject new momentum to regional bloc SAARC during the two-day summit beginning on Wednesday (26 November),  Indian Prime Minister Narendra Modi arrived in Kathmandu on Tuesday (25 November). Modi has always insisted that development of close relations with neighbours was a key priority for his government.
Meanwhile, China has said that it wants to "elevate its partnership" with the South Asian bloc amid a debate in the official media in Beijing on enhancing China's role in the eight member grouping from an observer to that of an active member. "We value the role played by SAARC and stand ready to elevate our partnership with it so that together we can play a greater role and contribute constructively to the region", Chinese Foreign Ministry spokesperson, Hua Chunying told a media briefing.

Currently, Australia, China, the European Union, Iran, Japan, the Republic of Korea, Mauritius, Myanmar and the US are observers to SAARC. As it has expanded its influence in the South Asian region firming up ties with countries in the region specially Pakistan, Nepal, Sri Lanka and Maldives with billions of dollars worth of aid and project assistance, China was vocal about upgrading its status as a member.

Warm Welcome For Modi
On his arrival to attend his maiden SAARC Summit, Modi was accorded a warm welcome. He was given a guard of honour and a group of girls presented a cultural performance for him. Modi will articulate India's position on various issues during the summit on November 26-7 and will hold bilateral talks with South Asian heads of state and government on its margins.

While Modi's official programme has no mention of his meeting with Pakistani counterpart Nawaz Sharif, he would be meeting Afghan President Ashraf Ghani, Bangladesh Prime Minister Sheikh Hasina, Sri Lankan President Mahinda Rajapaksa among others.

In his pre-departure statement, Modi said development of close relations with neighbours was a key priority for his government and he was also looking forward to holding talks with other South Asian heads of state and government on the margins of the summit.

"Although this is my first SAARC Summit, during the last six months, I have interacted extensively with leaders of SAARC countries beginning with their auspicious presence at my swearing-in ceremony. Development of close relations with our neighbours is a key priority for my Government," Modi said.

Noting that the summit's theme was "Deeper Regional Integration for Peace and Prosperity", he said India has always emphasised on the importance of greater regional integration at all levels for the socio-economic development of the South Asian region.

"We have undertaken several initiatives in this regard on bilateral, sub-regional and regional basis, and will continue to do more. We hope that the summit will lead to concrete outcomes, particularly in regard to various initiatives on enhancing connectivity that have been under discussion for a long time," he said.

"This will be my second visit to Nepal within four months, which reflects the importance we attach to our unique and special relations with Nepal. There has been significant progress in the implementation of the decisions taken during my visit to Nepal in August 2014. I look forward to reviewing the progress in our relations with Prime Minister Sushil Koirala and other Nepalese leaders," he added.

Prime Minister Modi's high-level delegation at the summit includes External Affairs Minister Sushma Swaraj, National Security Adviser Ajit Doval, Foreign Secretary Sujatha Singh and a number of senior officials of various ministries.

Modi, after becoming Prime Minister, has been pushing for a stronger SAARC and there has been a lot of enthusiasm among top diplomats of various countries about what he brings to the table to make the eight-nation grouping a regional powerhouse.

The theme of the summit is "Deeper Regional Integration for Peace and Prosperity" and diplomats of a number of member countries said there have been expectations that the summit will make "breakthroughs" in some areas.

The leaders are also expected to deliberate on enhancing cooperation in the fields of education, healthcare, energy security and poverty alleviation.

Diplomats said there will be a detailed discussion on removing hurdles for ensuring free flow of trade among the member countries.

Acting Foreign Secretary of Nepal Shanker Das Bairagi said strong commitment and decisive actions are required to fully and effectively implement South Asian Free Trade Area (SAFTA) agreement.

The authorities have put in place an elaborate security cover deploying over 25,000 armed commandos across the capital which has been decked up to greet the leaders of the member countries.

Huge billboards and posters of SAARC leaders from Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan, Sri Lanka and Afghanistan, adorn the main streets.

As Foreign Secretaries of the member countries concluded two-day deliberations yesterday to finalise agenda of discussion for the summit, there have been apprehensions that India, Pakistan bilateral relations may overshadow the summit.

Indian Co Gets Nepal Nod To Build Hydel Plant
Nepal has given an Indian company permission to build a 900 megawatt hydropower plant, government officials said on Monday, as the Himalayan state looks to ease chronic energy shortages by opening up its rivers to its larger neighbour.

The two countries will sign an agreement for the $1.04 billion project, which provides Nepal with free electricity and India energy for its power-hungry economy, later this week when South Asian heads of state meet for a regional summit in Kathmandu, Nepal's Law Minister Narahari Acharya told Reuters.

"We have passed the Arun III agreement. It will be signed this week with the Indian company," said Acharya following a cabinet meeting where the project was approved.

Indian firms are investing billions to develop Nepal's hydropower potential, encouraged by an electricity trading pact signed between the two countries last month and pushed by Indian Prime Minister Narendra Modi.

Growing investment in Nepal's energy industry comes as New Delhi looks to grow its influence in its smaller neighbours, where China is increasingly active.

The project, which will be built by Satluj Jal Vidyut Nigam (SJVN) Limited, was originally cleared in 2008 but never implemented after Kathmandu lobbied for greater benefits.

Under the agreement SJVN will develop the plant on the Arun River in the country's east, and supply a fifth of generated electricity to Nepal for free, said Ghanashyam Ojha, external affairs chief at the Investment Board Nepal.

Nepal will earn $3.48 billion over 25 years in royalty, income and taxes from the plant, officials said, and will then take ownership of the project.

Indian firms are negotiating with the government for power plants that would produce a total of 8,250 MWs, officials in Nepal said, and Kathmandu estimates $7 billion will be invested in its hydropower industry over the next 5 years.

Nepal has the potential to generate 42,000 MW of hydropower but today produces 800 MW -- less than demand of 1,400 MW.


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