<NEPAL>

<Water Sharing Issues Nepal agreed to the 1920 Sarda treaty, involving an exchange of territory, but not an advantageous one for Nepal. India enjoys most of the benefits of the Kosi and Gandak treaties (of 1954 and 1959), leading to the construction of dams primarily irrigating and protecting Indian lands. The outcome was viewed by many in Nepal as a sell out of their natural resources (although it was resistance in Nepal that prevented construction of larger dams that would have accrued more benefits to that country). Meanwhile, Indian insistence on management control and refusal to allow independent assessment of downstream benefits have induced suspicion in Nepal, encouraging stalling tactics. The relationship between the two countries on water resources has been inconclusive and often unsettled. Nepal does not have much of a manufacturing base but the hydroelectric potential of the country is more than sufficient to transform the economy. However the continued neglect and petty politics have ensured that Nepal remains a net importer of electricity from India. Bhutan, has forged a different path on hydro-electric development; one benefitting both countries. Thimpu has financed much of the country's impressive economic growth, political modernisation and social development in recent years through revenue from Indian-designed hydroelectric projects on its soil that provide power both to Bhutan and to India's North-East. Political Turmoil, Inability to frame a constitution. Baburam Bhattarai of CPN(UML) is the new Prime Minister. [Deputy of Prachanda alias Pushp Kumar Dahl] Prachandas initial inclination towards China was not liked by India. MADHESHIS: People of Indian origin mostly inhabiting the Tarai Plains.

<BANGLADESH>
<Water Sharing Issues New Delhi and Dhaka have agreed to sign a 15-year interim accord on sharing the waters of common rivers Teesta and Feni but the deal has to be jettisoned due to last minute flip-flop by the West Bengal Chief Minister Mamta Banerjee. Working plan on the sharing of the waters of five other common rivers Dharla, Dudhkumar, Manu, Khowai, Gumti and Muhuri, are also on table. Working of the 1996 Ganga Waters Treaty was reviewed. Renewed the existing Inland Water Transit and Trade Protocol. Under this protocol, vessels of both the countries will carry cargo on river routes till March 31, 2012. Common Power Grid to ensure efficient power usage in both countries. Power Purchase Agreement with India to import 250 MW. On Ms. Hasinas last visit to India Bangladesh was extended a $1 b line of credit. Bangladesh agrees to allow transit of construction material for PALTANA Power Plant in Tripura. Decision on the freight rates for cargo to be transported from Kolkatta to Akhaura land customs station via Ashuganj inBangladesh. Setting up of border haats, addressing issues related to tariff and non tariff barriers, upgradation of Bangladesh Standard Testing Institute and modalities for transit trade. Indira-Mujib pact signed in 1971 and Border Management Agreement signed in 1975 Transit trade through Chittagong and Mongla Port. India has been using Bangladesh's waterways for a long time as transit paths for goods. There was no objection to that. However, the issue of road transit is being opposed by a section of politicians and their sympathisers. In the changing situation, Nepal has started enjoying transit facilities through Bangladesh and the Indian territory. Bhutan, another landlocked country, will get the same facility soon. However, there are formidable challenges in Bangladesh when it comes to granting transit facilities to India.

Maitri Express from Kolkata to Dhaka.

Decision to jointly celebrate Tagore's 150th birth anniversary Joint production of films and theatre, and plans to offer tourist packages for sites linked to the poet's life on both sides of the border.

Sonia Gandhi received the Bangladesh Swadhinata Sammaona, or the Bangladesh Freedom Award, on behalf of late Prime Minister Indira Gandhi, for her outstanding stewardship during the Bangladesh Liberation War in 1971.

<Trade Trade highly in favour of India ($3 b = $2.3 + $ 0.7). Correcting the Trade Imbalance a high priority for Bangladesh. India increases the quota for readymade garments from Bangladesh from 8 million pieces to 10 million pieces for this financial year.

< Maritime Dispute On the issue of demarcation of the maritime boundary, Bangladesh has gone to the Tribunal on the Law of the Seas. India hopes the issue to be amicably resolved in the near future.