When Land comes in the Way: India’s Connectivity Infrastructure in Nepal

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Land acquisition for infrastructure projects abroad is one of the principal challenges the Indian government faces while pursuing its strategy of regional connectivity in South Asia. This paper examines two in-depth case studies on Indian-funded infrastructure projects in Nepal and surveys the institutional impediments and expertise deficiencies that cause delays in the process of land acquisition.

Such issues lead to protracted problems, on the ground between central, local, public and private stakeholders, to occasional tensions in bilateral government relations, and most importantly, to significant escalation in costs to India’s public exchequer. Despite the strategic and economic significance of this issue, no research has been previously conducted on how land acquisition and property rights hinder India’s infrastructure projects and strategic connectivity objectives.
Our paper also offers a comparative assessment of national and multilateral development partners such as the Asian Development Bank (ADB) and Asian Infrastructure Investment Bank (AIIB) and why they have been more successful in overcoming similar challenges. This is because they prepare country-specific guidelines and have expertise and partners to assess the potential risk of land acquisition. They also develop capacity- building initiatives that support domestic enforcement of property laws that regulate compensation and rehabilitation of affected landowners.

The paper contributes to the evolving policy and institutional debates on how the Indian government, and the Ministry of External Affairs (MEA) in particular, can enhance its expert and technical capacity to engage in future land acquisition processes abroad, especially in the case of Nepal and other neighbouring countries. It makes the case for the Indian government, via MEA, to:

1. Encourage interactions between diplomatic generalists and various domestic Indian expert stakeholders involved in land governance and property rights
at the central and state levels. This should help in
the development of clear benchmarks for all land- and property-rights related issues involving Indian infrastructure projects abroad.

2. Deepen bilateral engagements between Indian officials and their counterparts in Nepal to exchange best practices on property rights and land acquisition governance, including, for example, digitisation of land records.

3. Coordinate with other national and multilateral development cooperation agencies to exchange best practices and develop Indian guidelines and standards for land acquisition, resettlement, and rehabilitation processes abroad. This could, for example, include the ADB and AIIB or the Japan International Cooperation Agency (JICA), and the United States Agency for International Development (USAid).