KATHMANDU, June 7: As Bharatiya Janata Party (BJP) leader Narendra Modi is set to assume office as the Prime Minister of India for the third consecutive term on Sunday, there is cautious optimism in Nepal that the fractured mandate, giving regional parties a bigger say in India’s central government, could help resolve several outstanding issues between the two countries.

The election results indicate a weakening of the BJP’s dominance, a resurgence of the Indian National Congress, and a growing influence of regional parties. With Prime Minister Modi remaining at the mercy of his coalition partners to stay in power, analysts in Kathmandu believe that the Indian government’s stance on thorny issues, including the Agnipath scheme, may soften in the days ahead.

One major issue straining Nepal-India relations lately is the Agnipath scheme introduced in 2022 for military recruitment, prompting Nepal to halt the recruitment of Nepali youths into India’s defense force. Under the scheme, selected candidates are enrolled as Agniveers for four years, after which 75% are released with approximately INR 11.71 lakhs in financial compensation.

This scheme bypasses many things including long tenures, pension and other benefits which were there in the old system. Unhappy with these provisions, Nepal decided to halt recruitment, affecting the strong ties maintained by India's Gurkha regiment, which annually recruited 2000 to 2200 Nepali youths.

Nepal has maintained that any such provision violates the 1947 Tripartite Agreement that governs the recruitment of Nepali youths into the Indian Army and any change in the recruitment procedures must first be approved by the Government of Nepal after consultation.

Coalition partners, mainly Nitish Kumar’s Janata Dal (United) from Bihar, have sought reviews of the Agnipath scheme. Prime Minister Modi, who previously stood firm despite mass protests against the scheme in June 2022, may now be forced to soften his stance. “I strongly believe that the new Modi-led coalition government will either scrap the scheme or review it to address the concerns of people. This will pave the way for Nepal to resume the recruitment of Nepali youths into the Indian armed forces, restoring normalcy in our bilateral relations,” argues Security Analyst Chiran Jung Thapa.

Observers believe that the BJP is also in need to review the Agnipath scheme as the party faced strong backlash during the election in Uttar Pradesh, Punjab, Maharashtra, and Rajasthan, where there is significant interest in military careers. Youths in these states had even launched protests against the scheme, calling for its scraping or thorough review. “In addition to the election setback, the main opposition party, Indian Congress, had promised to scrap the scheme altogether. This will eventually force the Modi-led coalition government to review or scrap it,” Thapa adds.

In 2014, Modi came to power amid national anger over corruption. In 2019, nationalist sentiment over surgical strikes helped in the election. The BJP, known as a Hindu nationalist party, focused its 2024 campaign on Hindu nationalism, including the grand consecration ceremony in the newly-built Ram Temple in Ayodhya. 

Some BJP elements had even suggested restoring Nepal as a Hindu state, causing unease in the bilateral relations. Analysts in Kathmandu believe that since the foreign policy of the new government will no longer be exclusively BJP-driven, the call for restoring Nepal as a Hindu state may gradually fade. The influence of coalition partners is expected to bring changes in some fundamental aspects of India’s foreign policy.

Most observers argue that India’s foreign policy is unlikely to see major changes or surprises, as New Delhi traditionally maintains consensus in foreign policy. Relations with all countries, including immediate neighbors, are expected to remain stable. 

However, Nepal’s hope to revive SAARC may not see tangible progress during Modi's new term. The exclusion of Pakistan's head of government from the swearing-in ceremony suggests Modi is less keen to revive the SAARC process.

It may be recalled that Modi’s ‘neighborhood first policy’ in 2014 prioritized Nepal, but relations soured after Nepal's 2015 constitution, leading to a six-month Indian border blockade. Relations improved from mid-2016 but faced another setback during the 2019 map dispute.

Despite ups and downs, Modi's tenure saw five visits to Nepal, the revival of bilateral mechanisms, resolution of issues, and advancement of connectivity projects. Recently, relations have stabilized, and with Modi's third term, major changes to India's Nepal policy are unlikely. However, resolving key issues such as deepening economic partnership and the long-pending boundary dispute related to Kalapani, Limpiyadhura and  Lipu Lekh will require high-level engagement both at the political level and bureaucratic level from both sides.

 
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