♤ In 2007, these strip maps were presented to both countries for ratification.

♤ Nepal refused to sign the documents without resolving the Susta and Kalapani disputes

India, too, did not endorse the maps.

3.9.1. Challenges

♤ Political transition in Nepal: Constitutional process and ethnic linkages invoving Madhesis, Tharus and janajatis pose a key challenge to the future of the bilateral relations.

♤ Cooperation in developing water resources: Nepal has 43,000 MWs hydropower potential that is known to be technically feasible and economically viable. However, major projects have not taken-off due to considerations outside the realm of economics. Ironically, India is a net exporter of power to Nepal. Over the years differences over over the 1954 Kosi Agreement and the 1959 Gandak Agreement, have become cause of resentment in. Three large projects namely — Saptakosi with 5,000MW, Karnali-Chisapani with 11,000MW, and

Pancheshwar with 6,500MW — have been stuck for 30 years. 27 survey licenses were granted to India comapnies, but none of them is in the construction phase.

♤ The China Factor: China has showed renewed interest in Nepal following the constitutional logjam, the earthquake in 2015 and the blockade on the Indo-Nepal borders in the same year. Changing political leadership inn Nepal has shown inclination to use the China factor vis-a-vis India.

♤ In 2012, Nepal approved a $1.8 billion contract to China for the West Seti Hydropower Project.

♤ In November 2017 in a decision which could have far reaching consequences in the region and for China, Nepal cancelled the Budhi Gandaki hydropower project which had been contracted to a Chinese company Chinese company.

♤ In January 2018 China began providing broadband connectivity to Nepal which had been an Indian monopoly hitherto.

♤ According to a World Bank report, Nepal needs to invest up to $18 million in infrastructure projects by 2020 to remove binding constraints to economic growth.