To keep China in check, India seals cooking gas supply deal with Nepal

New Delhi also announced forming a high-level official committee to look into Nepal’s demand for a LPG pipeline from Raxaul- Motihari (Bihar) to Amlekhganj (South-eastern Nepal) as well as extending the natural gas pipeline from Gorakhpur into Nepal.

What is the reason behind the move?
Following threats by Nepal to source its cooking gas from China thereby undermining India’s exclusivity since 1974, New Delhi has rushed in to placate its neighbour by promising to meet its entire domestic demand for petro products and adding a few more sweeteners such as product pipelines and storage.

After gifting fuel during the alleged six-month economic blockade against Nepal by India that began in September 2015, China was offering to become an alternate supplier.

What is the agreement?
State-owned Indian Oil Corp (IOC) signed a petroleum trade agreement to supply about 1.3 million tonnes of fuel annually to Nepal with a promise to double the volume by 2020.

India also agreed to extend the proposed Raxaul-Motihari to Amlekhganj product pipeline to Chitwan with the promise to start work on the pipeline in 2017-18. The project has been hanging fire since 2006 with Nepal willing to bear the expenses and IOC providing technical help.