Date:16/05/2006 URL: http://www.thehindu.com/2006/05/16/stories/2006051620341300.htm

National

Government seized of Nepal dues

Amit Baruah

New Delhi is more than aware of Kathmandu's precarious finances

About Rs. 100 crore is payable to over 20 firms Arms have been supplied for years

NEW DELHI: After supplying weapons to the Royal Nepalese Army (RNA) for the past several years, the Government of India has been engaged in recovering money from Kathmandu.

In response to a written question, Minister of State for External Affairs E. Ahamed told the Rajya Sabha on May 11 that "certain outstanding dues" were payable by Nepal for defence supplies made by India.

Interestingly, he did not contest the figure in the unstarred question that a payment of about $26.4 million (about Rs. 100 crore) was due to over 20 Indian companies.

Asked what action was taken to recover the money, he said: "The Government is fully seized of the matter. It has urged the Government of Nepal to settle outstanding dues at the earliest."

According to official sources, the amount owed to the Governmentwas essentially for the period 2001-2006 though some dues had piled up from previous years as well. For several years India supplied arms for the RNA in its efforts at building up the Army as a bulwark against Maoists.

The weapons included the Indian-made Insas rifles, ammunition, jeeps and other non-lethal equipment. Arms sales had become a major issue between India and Nepal, with Kathmandu trying to turn to Beijing to make up for the lack of supplies from New Delhi.

The sources told this correspondent that King Gyanendra's Government paid some money for arms purchases earlier this year. While not providing exact figures for dues to New Delhi, the sources said the amount mentioned in the unstarred question was accurate.

Future ties

In the changed situation, India is waiting to hear from the new Government on the contours of a future relationship.

So far, the issue of dues has not been raised with the Girija Prasad Koirala Government. New Delhi is more than aware of Nepal's precarious finances.

Asked whether there was any possibility of India writing off the dues, the sources said it depended on what the new Government in Nepal wanted from New Delhi.